It is not a question of whether Auckland's house prices will fall but by how much, a financial services company says.
Australasian Trading Management warned investors in its Daily Market Insights home values had "already pulled back significantly" in Australia's hot Sydney and Melbourne markets and the "price correction" was spreading to Auckland.
It pointed to figures by Auckland agents Barfoot & Thompson, showing the city's median home value hit $810,000 last month - a 10 per cent fall from the market peak price of $900,000 in March last year.
Fellow analysts CoreLogic and industry lobby the Real Estate Institute of NZ, meanwhile, cautioned median prices were not the best measure of overall home values, and said Auckland house values were holding steady.
However, Australasian Trading Management said it was "clear that the Australian and NZ property markets are now in a period of price correction".
"But the key question is how deep the price drop will be?" the analysts said.
Australasian Trading Management's report comes on the heels of other New Zealand economists also warning the Auckland market may follow trends seen in Australia.
According to CoreLogic figures, Sydney house prices are down 5 per cent, while Melbourne prices were down half a per cent for the first time in six years.
ANZ chief economist Sharon Zollner told Q+A she was watching the New Zealand market with interest because of what was happening across the ditch.
"Another risk has emerged on the horizon and that would be contagion from a more marked slowdown in the Australian housing market than is currently expected," she said.
ATM backed this view saying Australasian property prices looked "overvalued" compared to the average income of Kiwis.
The analysts also thought new Government policies, including restricting immigration and foreign ownership, would hit prices, while local banks were likely to charge more for home loans as they in turn faced higher borrowing costs from the US.
"While we do not believe there will be a full-blown property collapse, our view is that house prices will moderate over the next few years," ATM said.
ASB chief economist Nick Tuffley agreed home values seemed high relative to rents and average incomes and that Government policy changes could hurt prices.
But he did not "envisage a material fall" in values.
"Auckland house prices have been pretty flat for the last two years, with marginal falls in recent months," he said.
"We expect prices to be pretty flat over the next couple of years, with very mild increases or falls possible."
"Still-strong population growth", a lingering undersupply of houses and sustained low-interest rates into next year would hold prices steady, he said.
CoreLogic senior research analyst Kelvin Davidson backed this, saying there was nothing to suggest an imminent threat to New Zealand's property values.
REINZ chief executive Bindi Norwell said Auckland prices had remained stable over the past 15 months rather than fallen.
REINZ statistics followed a similar pattern to Barfoot & Thompson's figures with a market peak median Auckland home price of $900,000 in March last year and a median price of $835,000 last month.
However, Norwell said the median price reflected the value of homes sold in a particular month, rather than the value of all homes, including those not up for sale.
This meant the median price could be volatile and influenced by the kind of houses that successfully sold.
For instance, if more expensive houses, such as those with more bedrooms, sold in a particular month as compared to apartments, then the median house value would likely be higher.
This was the case in March 2017 when the median house price peaked on the back of a larger number of properties selling for more than $1 million than was usual, Norwell said.
The opposite pattern occurred in June this year when more small apartments and three-bedroom homes sold in certain areas of the city, while five-bedroom homes decreased.
As a result, median house prices have fluctuated up and down since the March 2017 market peak rather than following a steady trend downwards.
"Therefore, we recommend people look at the REINZ House Price Index, which measures the changing value of property in the market rather than being skewed by a change in the mix, such as the number of bedrooms a property has or a monthly fluctuation in median price," Norwell said.
According to this index, house values in Auckland are up 0.9 per cent over the past year.
Property valuer Quotable Value's House Price Index has Auckland values up 0.6 per cent over the same period.
Rather than suggest a fall in home values, Norwell said the house price indexes showed "just how stable the Auckland market has been over the past 15 months".