If you are secure in your job and have enough money saved, now is the time to buy a house, say real estate experts.
No one should try to pinpoint the bottom of the housing market and if the price is right, the timing is perfect, says BNZ chief economist Tony Alexander.
His call sits uncomfortably with talk of recession and the worsening international outlook, but it is based on sound judgment.
"As long as I figured on keeping my job I would be out there actively looking for a property at the moment," Mr Alexander said.
"I wouldn't be hanging off simply trying to pick the low point in the house-price cycle."
Economists had proved they could not pick the top of the cycle, so no one should expect them to pick the low point, he warned.
He believes real estate sales have probably almost reached their weakest level, and activity is likely to fluctuate and start moving up before the end of the year.
House prices will possibly fall another 5 per cent, but will stabilise by the end of the year, then rise slightly next year, he says.
Buyers should be seeking a mortgage interest rate of 5.5 per cent fixed for five years.
"But as I wait for this rate, I'll become increasingly prepared to accept something just below 6 per cent just in case the world suddenly looks like a brighter place," he said.
Mr Alexander is not alone in his views.
Property author and advocate Kieran Trass is running a seminar in Remuera on March 7 on taking advantage of the crash.
He says Auckland flats are the first category of property this decade to emerge as cashflow-positive - "paying you to own them" - because of interest rates and property prices.
BIS Shrapnel's managing director, Robert Mellor, said this week the Auckland house market would reach its lowest level by May and called for banks to loosen up on lending.
Strategic Risk Analysis economist Rodney Dickens, of Whangarei, said the market was eroding the benefits of renting a house, and it now made more sense to buy.
"Only six months ago the economics were hugely in favour of renting, but with house prices having had more than half of the fall we expect and five-year fixed mortgage interest rates having fallen from 9.1 per cent to 6.5 per cent, it would be understandable if quite a few people were tempted to buy rather than rent and to lock in longer-term mortgages to give them certainty about interest costs," Mr Dickens said.
Some people were responding to the economic conditions by buying existing houses, rather than building new ones.
"But this response will drive section prices down relative to existing house prices and restore the competitiveness of new housing."
UBS NZ senior economist Robin Clements says would-be buyers should house-hunt now, but not necessarily buy.
The next round of the recession could bring wide-scale job layoffs, debt-servicing trouble and more forced house sales and it would not be until the middle of the year that people would be able to tell where the economy was going.
"My base case is that we will muddle through without that worst-case scenario but that is the risk and house prices will continue to fall for much of this year."
An online survey of 2852 New Zealanders this month by the Business Council for Sustainable Development found nearly a fifth of them feared they might lose their jobs this year.
Those on low pay and those making more than $100,000 a year were among the most worried.
Bayleys' communications manager Scott Cordes said savvy buyers can get great deals and he cited Saturday afternoon's auction of seven Whisper Cove properties at Snells Beach which sold for about half price.
More than 300 people watched as three-bedroom villas - one valued at $1.07 million - went for $500,000 to $550,000 and an apartment sold for $328,000.
A year ago, buyer Sandi George found a place there priced at $900,000. At the weekend, she got it for $515,000.
Mr Cordes said the many mortgagee auctions and receivership deals such as those at Whisper Cove offered great buying.
But people considering buying a family home should not forget long-term principles.
"If you're buying and selling simultaneously, you're in the same market. Both houses will have dropped in price by a similar percentage," he said.
Market recovery is being picked at between six months and three years, he said.
Barfoot and Thompson director Peter Thompson said people needed to act differently in a weak market.
His advice is:
* Be cautious about borrowing - don't get a loan for any more than 85 per cent of a property's worth
* Sell your own place before buying; cash-buyers get better deals and can bid confidently at auctions
* Seek longer settlements: instead of a month go for two, giving more time to seek a new home
* Consider selling by auction: Barfoot and Thompson says it sells auction homes in 35 to 40 days, against 60 days for fixed-price.
* Fix a mortgage for the longest-term possible, up to five years if you can.
* Don't over-commit - buy in an affordable suburb then move to your "wish suburb" a few years later.
Mr Thompson said Barfoot agents had noticed the market picking up. More people at open homes, more multi-offer contracts and 241 properties sold last week - the highest number since November 2007 - were evidence of a change, he said.
Sydney real estate expert Neil Jenman encourages people to negotiate directly with house-sellers to get the best deals in bear markets.
"Tell the agent, 'I want to meet the sellers.' If the agent gives you the slightest bit of cheek such as saying something inane like 'What for?' resist the urge to reply, 'Because I want to meet the people who are getting more than half a million dollars of my money, you inconsiderate boof-head' and go and knock on the sellers' door.
"Say, 'G'day, we are the people who are buying your home. Do you mind if we come in?' That's all you have to say - and, presto, you are sitting with the sellers, the big decision makers," said Mr Jenman.
But in Auckland, Mr Cordes and Mr Thompson strongly advised against such meetings, saying agents were professional negotiators.
BEAR MARKET MOVES
* Tough it out - prices will eventually rise again
* Don't sell unless pushed; the market is still dropping
* If you're thinking of buying, one economist says leap now
* Mortgage payments woes? Talk to the bank and explain
* Consider restructuring loans and waiting out the slump
* If you have to sell, spruce and clean the house but be realistic on price
* Buyers fixing long-term are getting favourably low interest rates
* Twenty per cent deposits are becoming more common, so save hard.