Election jitters and uncertainty have added to falling optimism in the housing market.
A survey by ASB Bank for the three months to October shows a net 17 percent expect higher house prices over the coming year.
That's at a six-year-low and compares to a net 32 percent in the previous survey.
Photo: RNZ / Cole Eastham-Farrelly
ASB chief economist Nick Tuffley said the election added to a slowdown in the housing market.
"First, loan-to-value ratio restrictions and slightly higher mortgage rates were causing most of the softness. But in recent months, uncertainty around the election has seen the market slow even further," he said.
Mr Tuffley said house price expectations were likely to stay muted.
"With a number of uncertainties around future housing policy, respondents appear to be remaining cautious," he said.
ASB economist Kim Mundy said they saw falls across all regions.
Although she said some regions fell more than others.
"In the North Island, excluding Auckland, we saw price expectations fall from a net 43 percent of respondents down to a closer 20 percent.
Ms Mundy said slightly higher interest rates are most definitely going to be impacting on sentiment in the market.
"You've also got uncertainty around the new government and what that might mean for new housing policies."
Respondents expect mortgage rates to rise over the coming year because of higher overseas rates, while the Reserve Bank is expected to stay on hold with the Official Cash Rate until early 2019.