Key Points:

Real estate specialists say the downturn in house sales has been a shock which has spread to other parts of the market.

"The volume drop has been a huge shock to the whole industry, not just agents but lawyers, mortgage brokers and valuers," a real estate agency reported to BNZ chief economist Tony Alexander, who yesterday released a monthly confidence survey.

The survey goes to 11,500 people, including agents, valuers, developers and landlords.

The agency said investors had vanished and overseas buyers were no longer interested in New Zealand.

"Buyers have gone to ground and vendors still want last year's price. internet inquiries are well down, numbers through open homes dismal, overseas buyers and rental investors have gone."

The high-profile case of agency The Joneses, reported this month, had had an effect on the sector, with sellers being more demanding on fees, said another agency. "The way the media have reported the spat between the Real Estate Institute and one of its members over fees is causing more vendors to want to talk about fees," that agency said.

"The housing market in Tauranga is particularly slow, with buyers happy to take their time," said another agency.

An Auckland property advisory and valuation firm said the market had been quieter lately, while a Whakatane agency reported sales down 10 per cent from last year and business down 20 per cent in August.

A Wanganui agency said sales needed a little more effort and time and an Auckland Central residential agency said listings were hard to come by, activity was sparse and fewer buyers went to open homes.

An Auckland eastern suburbs agency said buyers were sitting on their hands and "waiting for prices to drop".

"Buyers are much more conservative and demanding of value for money. They are taking longer to make a decision," said one agency.

Another agency reported South Auckland residential sales down 50 per cent in September and said buyers were more cautious. But a landlord said rents were rising and the sector was "looking good".

One agency said it was enjoying the usual spring/summer business lift and buyers outnumbered sellers.

"Property - it's a lull, but can't see this being long-term," said another real estate specialist.

A Coromandel specialist said sales were slow but a Queenstown agency reported overseas and first-home buyers returning to the market.

A Ponsonby agent reported two slow months but said August prices had been high, with one sale breaking $2 million.

"September bounced back with the office breaking all previous years' September results, both in numbers and total value of sales," the agent said.

Survey Comments

Some agencies report a 50 per cent activity decline.

Others say activity is down between 10 and 20 per cent.

Twelve respondents were negative, nine positive, two neutral.

This pattern is consistent with last month's survey.