Tomorrow we will get a fresh update on the local housing market when REINZ releases it's data for July.

While winter is traditionally slow for the real estate sector, a slump across the Tasman has heightened concerns that we may see price falls here for the first time in several years.

At a national level the average price will likely continue to rise as we see growth roll on in regions like Nelson and Wellington.

But in Auckland, where prices have been flatlining for more than a year, the prospects of prices slipping in to negative territory looks increasingly real.

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Even Reserve Bank Governor Adrian Orr has warned of the possibility.

"We're within a wisp of that happening in Auckland housing prices at the moment," Orr told TVNZ's Q+A at the weekend.

On one level Orr has simply acknowledged that markets always rise and fall - something no investor should ever forget.

He was careful to add that a slump is not forecast in the Reserve Bank's current projections.

Could we see Auckland prices follow the pattern they have in Sydney, where they are off by five per cent - with some economists predicting a fall of up to 15 per cent?

Sentiment in Sydney has turned fast. You've only got to scan the media coverage to see that stories about crash-risk and a buyers market are getting all the headlines.

One would imagine that, with the shortage of housing in Auckland still acute and immigration still strong, the basics of supply demand would prevent a major slump.

But as Orr also points out extended periods of stability in markets are more of an exception than a rule.

And if history is any guide, where Auckland goes the rest of New Zealand soon follows.

Orr has the luxury of some trump cards up his sleeve.

If the market were to slump harder than expected the Reserve Bank could loosen the LVR (loan to value) rules currently making life tough for investors and some first home buyers.

It also has scope to cut interest rates.

Stating in last week's Monetary Policy Statement that rate rise was unlikely until 2020 has already helped to put downward pressure on mortgage rates.

Regardless, the fact is that the Auckland housing market in 2018 looks very different to the one we have grown accustomed to.

We need to brace ourselves for an economy that is no longer underpinned by the "wealth effect".

In other words consumers are no longer spending in the surety that their property values will rise by more than they can earn in a year.

That has to be contributing to the slowdown in economic growth this year.

As an infrastructure report (released today) by Chapman Tripp points out, house price growth has outstripped income growth in this country every year since 2003, producing one of the worst house price to income ratios in the OECD.

Many homeowners simply won't remember a time when the market wasn't a one way bet.

The quiet market conditions should be welcomed by first home buyers. Slowly we'll see more affordability returning to the market.

This may be helpful for the Government's social goals.

But the Coalition will need to keep a watchful eye on the data because, like it or not, we remain a nation of property owners and investors - with our fortunes tied to our homes.