Smaller houses could mean more affordable housing for Aucklanders.
Statistics NZ figures show that the average value of new dwelling consents issued in Auckland dropped to $349,101 in April compared to $389,101 in March.
The average size of townhouses and home units dropped from 142sq m in each of the previous two months to 112sq m in April, resulting in a value drop from $349,517 in March to $256,898.
"This suggests that developers may be paying more attention to the more affordable end of the market and not as much as they were on the top end," a report on interest.co.nz said.
The value of new dwellings consent is the lowest it has been since November 2011.
"It appears especially significant because in 10 of the past 18 months the average value of new dwelling consents issued in Auckland has been above $400,000," said the report.
The fall in average value of new dwellings was driven mainly be a smaller stand-alone houses, townhouses and home units being approved.
The average size of stand-alone houses dropped to 215sq m in April, the lowest since January 2011, resulting in a reduced cost of $444,183 from $500,409 in March.
The changing mix of what is being built could also be another factor in making housing more affordable.
The number of new Auckland homes approved rose from 3282 in the 12 months to April 2011 to 11,629 in the 12 months to April this year.
Stand-alone houses accounted for 82 per cent of new dwelling consents, apartments were 5 per cent, townhouses and home units 8 per cent and retirements village units 5 per cent in 2011.
But in the year to April, stand-alone houses accounted for just 48 per cent of new dwellings, apartments 22 per cent, townhouses and units 22 per cent and retirement village units 8 per cent.