KEY POINTS:
The Real Estate Institute will today release data from last month that is expected to show the slump has settled in.
Quotable Value and Barfoot & Thompson have released gloomy housing figures in the past few days.
Shamubeel Eaqub, investment research director for Goldman Sachs JBWere (NZ), said
house-price slumps were almost impossible to reverse once they bedded down.
"This looks very gloomy. I would note that the United States experience shows that once house prices start falling and there is feedback loop through the slowing economy, it's difficult to pull out of the nosedive," he said.
One property commentator believes New Zealand is heading for its biggest property slump in almost two decades and warns prices could plummet by a quarter.
Kieran Trass, property investor and Suburbwatch website director, predicted that a major house price slump was inevitable because all the factors driving up the market were disappearing.
Migration had slumped, interest rates were punitively high and more than half the suburbs in Auckland, Wellington and Christchurch had suffered price drops in the last quarter of 2007, some by 10 per cent, he found.
"We're heading into the worst property slump we have experienced in nearly two decades and it will eclipse the soft slump of the late 1990s by far," he said.
BNZ chief economist Tony Alexander released a confidence survey which showed a mixed picture.
One agent reported fewer inquiries about open homes but another said that buyers felt now was the best time to buy.
"They all seem to have the feeling that it's now become a buyers' market and they are going for it," an Auckland agent said.
Property valuers were busy on residential work but for refinancing rather than new loans, they said.
Tenants were beginning to default on rent payments, another agent said.
Mr Trass said his predictions were not always right.
In 2004, he called for homeowners to beware of an impending crash. He acknowledged that property values rose by 50 per cent since then.
Yet he stood by his latest forecast yesterday, saying there was no sign of light at the end of this tunnel.
The number of people per household had risen for the first time in half a decade, with rents unaffordable and more people having to share.
People must increase their cash flow and cut their living expenses to cope with the property slump, he warned.
EXPERT TIPS DISMAL TIME
Kieran Trass found:
* House sales have slumped drastically
* They are 40 per cent down on a year ago
* Auction clearance rates are dismal
* Length of time to sell is rising fast
* Instead of 29 days, it now takes at least 36 days