The property market has cooled. So is it time to adjust your price expectations?

Vendors everywhere think their home is worth more than it is. But when the market cools, it's even harder for vendors to be realistic about price, says real estate agent Martin Dunn of City Sales.

What makes it worse in 2018, adds Martin, is that vendors don't seem to have noticed that the world is in the midst of political turmoil, which inevitably affects New Zealand's property market.

What's more, there have been economic crises approximately every 10 years with the oil price shock in the 70s, the stock market crash of the 80s, the Asian crisis in the 90s and the global financial crisis of 2007/8, says Martin.

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"So if you think your little house in Hillsborough is still worth $2 million, you are possibly dreaming."

Auckland will bounce back, he says. It just depends how soon you need to sell. If it's now, or the next six months to a year, you might have to adjust your price expectations.

Martin cites the example of the Global Financial Crisis where the average house price dropped from $600,000 to $570,000, but vendors were still expecting $685,000.

The market did eventually recover. But, for the short term, it was difficult to sell at the previous high.

In the apartment market, where Dunn specialises, there is a standoff between buyers and sellers, although the traders have started to return.

Vendors, he says, are expecting $10,000 a square metre on their properties. Yet most apartments are selling for less than that and some for as little as $6000 to $7000 a square metre.

He cites the case of one glamorous apartment, which in mid-April attracted bids up to $625,000, while the owners were hoping to get $700,000, plus $80,000 for the carpark.

Dunn says vendors will have to temper their price expectations "big time", although eventually the pent-up demand and shortage of homes will catch up in Auckland.

The cooling market could mean $100,000 less on a $1 million suburban property, says Sandra Forrester, Barfoot & Thompson branch manager. That can be hard to stomach.

Vendors do need to be looking at what has happened in their market over the past six weeks, not six months, says Sandra.

"It is the current market they have to be thinking of. It could be worse in three to four months. I hope not. But it probably won't get any better."

Sandra says the banks aren't helping matters by making it hard for borrowers, especially investors.

"They just about want to take your first-born child," she says.

What's more the banks are taking 10 to 15 days for finance.

"I have seen someone stacked up in a four-property chain."

The top of the market was around late 2016, early 2017, she says, and things have changed since then, including tighter loan to value ratio rules from the Reserve Bank of New Zealand.

"That is trickling down through the whole system."

In April, some vendors may have found they didn't get a single potential buyer attending open homes, she says, or there may have been five or six over a three-week marketing period compared to 20 in a better market. Such low numbers might not lead to an offer.

"It's a cruel, hard sobering conversation to have with a vendor when no one has turned up. It is happening now."

Cooler markets, as New Zealand has seen over the past 12 months, present problems for agents who are often blamed if the house doesn't sell at the vendor's price expectation.

But the reality is that they can't work miracles and make the market do something it isn't.

The publication of new Auckland Council capital values (CVs) released last year led to some vendors having inflated views of what their properties are worth, because their property might have sold for more than the CV previously.

"Don't get yourself hung up on a CV," says Sandra. "Your property is not worth (the CV) unless you find a motivated buyer."

What vendors do need to remember is that they're selling and buying in the same market.

"Let's say the property you are selling was worth $1 million, but now $920,000. But the property you were going to buy at $1.2 million may have come down to $1.1 million.

They are not worse off," she says.

Forrester says vendors are beginning to understand that their price expectations do need to be modified.

She says: "We have had years, and years, and years of massive capital gain.

"If you have owned property in that time you have been very lucky with the growth."