Is the Auckland housing market slowdown about to ride into town like John Wayne and save National's bacon?

A few months of level Auckland price growth obviously doesn't solve the housing shortage, or affordability issues for a generation of first-home buyers.

But it is remarkable the extent to which the tone of conversations about property has changed in Auckland.

It took a long time, and a heck of a lot of house price growth, for people to really get up in arms about the next generation of home buyers.


It's easy to join the chorus of calls for cooling measures when prices are rising in double-digit percentages every year.

Now the depth of Auckland voter altruism looks set to be tested.

The boom is over.

The slowdown started as far back as July last year when there were signs that the rate of growth had peaked. But it was hard to be sure, at least until April, because the same kind of slowdown occurred in late 2015.

That time the market bounced back sharply in February, March and April.

This time around growth appears to have stalled good and proper. Annual growth for Auckland is down into single digits, but it's flattered by the tail end of the boom, that data that will have fallen off the charts by the politically auspicious month of September.

The Reserve Bank even acknowledged it in the Monetary Policy statement earlier this month.

But none of that really brought it home to me. What got me was how quickly the tone of the conversation has changed at social events in Auckland over the past few weeks.


Admittedly, I don't get out that much. But statistics, data, economists and Reserve Bank forecasts can't compete with the anecdotal evidence you get at a party in Mt Eden or on the sidelines of your kid's sports field.

When those anecdotes start to sync with the official data something is up.

The stories are told by those who are trying to sell, or have close friends or family trying to sell. And they all suggest it's taking longer than they'd like.

Open homes aren't packed, auctions aren't happening.

John Wayne rides to the rescue... from True Grit (1969) Supplied Pic
John Wayne rides to the rescue... from True Grit (1969) Supplied Pic

Fear and worry are starting to take hold among sellers and their real estate agents. The lawyers and the bankers are getting antsy.

News like last week's Goldman Sachs report predicting a housing market "bust" won't help.

In fact, Goldman's call - that New Zealand's market has a 40 per cent chance of falling at least 5 per cent in the next two years - was hardly shocking.

You couldn't swing a cat at a Reserve Bank press conference without hitting an economist or commentator with a gloomier forecast than that.

Bill English made exactly that point (okay, minus the cat) when he said a 5 per cent correction would be a reasonable result given the enormous growth of the past decade.

But the Goldman story struck a nerve.

It's true most homeowners will be able to absorb that kind of fall. But the noise and the narrative is created at the margins.

Many people trying to sell are being wrong-footed by the slowdown. Prices are only going sideways and technically they're still near their peak. Although that's when they are averaged on a graph. Real life is more lumpy.

The difference between nine potential buyers or 10 turning up at your open home isn't much at all. But one buyer instead of two makes a huge difference to the price you can command.

The boom is over. Now the depth of Auckland voter altruism looks set to be tested.

No buyers, compared to one, and it doesn't take long for the panic to set in.

To put it another way, imagine biking up a hill. The distance between "nearly at the peak" and "just over the peak" is very small. But the experience for the cyclist is radically different.

All the property stats now tell a story of more homes on the market taking longer to sell as people try to hold their ground on price expectation.

In theory, with immigration still at record levels and supply slow to catch up, prices can't fall far. But if immigration has been such a big driver of growth, why has Auckland growth hit the wall while longterm visitor arrivals continue to hit new records?

Presumably, population growth provides a safety net that ensures the market can't really slump too far or for too long - but throw in rising interest rates, tougher bank-lending criteria and the supply growth already in the pipeline and who knows?

A flat market will make it tougher for opposition parties to come out swinging with policies designed to whack the market even harder.

And that provides some shelter for a Government that has quite rightly been copping flak for being slow to move on house price affordability.

There are numerous complex reasons for our housing shortage.

National remains ideologically opposed to attacking property investment on the demand side and the supply side solution has been very slow to gear up.

National points to the political deadlock and apportions a fair bit of blame to local government politics in Auckland.

But in its ninth year of power the buck has to stop with this Government.

It is vulnerable on the issue but could be about to get a lucky break.