We've done a lot of analysis recently on the size of New Zealand's market slowdown, with a special focus on Auckland.

The drop in activity is obvious across many different measures, but this week we're looking at the share of private sales compared to agency sales and then comparing Auckland's sales to those nationwide.

The level of private sales (those properties that sell without a real estate agent's involvement) in the residential sales market surprises many. Over the last 25 years, the share of annualised private sales has hovered between a minimum of 12 per cent in 1993 to a maximum of 18 per cent in 2005.

Reflecting back to 2005, the market was booming, which tends to give people confidence that there's less need for an agent to get a great price. In the most recent growth cycle, the share of private sales peaked at 16 per cent in April 2016 and in the year to the end of March 2018, 14 per cent of the almost 85,000 sales were private.

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This reduction in private sales is just one more indicator of reduced property market confidence.

In Auckland, the share of private sales is even lower at just 5 per cent of the total 23,000 sales in the last year — which is itself a very low level of total sales too. In fact, it's just above the low experienced during the 2008 Global Financial Crisis (18,500 sales in the year to the end of February 2009). For context, the recent high was almost 40,000 sales in Auckland in the year to September 2015.

We also analysed Auckland's share of nationwide sales. In the year to the end of March 2018, only 27 per cent of nationwide sales were in Auckland.

This is the lowest it's been for at least the last 11 years — way down from a peak of 38 per cent in the year to the end of May 2015. The key question then is why such a dramatic drop in Auckland compared to elsewhere?

Without getting into a major socio-economic debate, the simplest difference between Auckland and the rest of the country is that the average value of residential property in Auckland is so much higher.

The significant reduction in the recent availability of credit means fewer people can afford the mortgage required to buy property in Auckland.

This includes property investors, first homebuyers and even those who already own a property who may be struggling to trade up. We've run some figures showing that the trade-up premium to go from a three-bedroom to four-bedroom property in Auckland has risen by $106,000 over the past five years to $290,000.

That situation is unlikely to change any time soon, so I'm expecting to see sales volumes stay near these low levels for at least the rest of this year and likely into 2019 (unless we see increased Government intervention of course).