KEY POINTS:
Crash or correction? That is the question for anyone trying to assess the direction of the housing market in 2008.
Certainly the numbers are not encouraging.
Latest Real Estate Institute figures show house sales hit a seven-year low last month - 5186, compared with 7566 in January 2007.
The national median price also fell, down from $345,000 in December to $340,000 in January. That compares with the peak price of $352,000 in November 2007.
Quotable Value figures show property values rose 8.9 per cent in the year to January, down from 10 per cent in the year to December and 13 per cent in the August year.
Meanwhile new house building consents in 2007 fell to their lowest level in six years.
Whether these indicators are the "achtung" signs at the top of a house price slalom, or whether they're pointing to a mere flattening out in values depends on who you talk to.
All economists agree this year won't be the housing market's finest. But a number say that unless other factors impact, such as another hike in interest rates, a sharp rise in unemployment or a migration outflow, the turn in fortunes will be more like an orderly slowdown.
UBS senior economist Robin Clements said house price inflation had probably slowed now to somewhere between zero and 5 per cent.
But he said an interest rate rise was unlikely, the labour market was still "as tight as a drum" and the flat net migration seen in December would stabilise.
ASB economist Chris Tennant-Brown said while monthly house price figures could vary wildly, the lower sales volumes and a five-year high in the number of days it was taking to sell a property were telling.
He said it had become a buyer's market. But the reality was prices hadn't actually fallen.
He cited the central Auckland apartment market as an example of a pocket where prices had already dropped.
ASB's quarterly Housing Confidence survey, out two days ago, shows falling optimism over house prices, with only a net 1 per cent of respondents now expecting prices to increase in the next 12 months.
BNZ chief economist Tony Alexander puts a positive spin on the gloomy property market figures in his latest weekly update.
He points out the fall in dwelling consents means there will be fewer properties coming on to the market, that the anecdotal evidence of a shortage in rental accommodation means growing demand, and that the country has domestically generated population growth.
"In the current environment where we are experiencing an overdue cyclical easing in the housing market it is easy to focus on the two big negatives of high interest rates and declining net migration inflows," he writes. "But there are many factors underneath with are supportive of the housing market and house prices."
His optimism is not shared by Shamubeel Equab of JBWere Goldman Sachs.
"We see plenty of risks to the downside," the investment bank economist said.
Mortgage rates were high, with floating rates heading higher.
Property commentator and publisher of suburbwatch.co.nz, Kieran Trass, is blunter.
"I think we're heading for a property crash, which means pretty much a 15 per cent drop in values across the board in New Zealand over the next two to three years.
"It's based on the fact that property prices are just so far out of alignment now with the fundamentals that underpin the property market."