Auckland's heated housing market is at a crossroads after the first average price drop in six months, says one of the city's biggest real estate agencies.
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Barfoot and Thompson's latest housing survey said the average price in August dropped by nearly 1 percent from July to $821,079, which was also lower than prices in June and May.
It was the first drop in six months.
It follows the latest QV House Price Index, released yesterday, which showed national values jumped 11.3 percent in the year to August, and were now 29 percent higher than in 2007.
Managing director Peter Thompson said there was still pressure on the housing market, with the onset of the traditionally busy spring period, and factors like the housing shortage were still boosting prices.
But he said there were forces pulling the other way too.
"To counter that we've got both Government and the Reserve Bank that are introducing new measures from either the 1st October or the 1st November. And I think people are still a little bit unsure of how that's going to affect real estate moving forward, and maybe that's just people who are holding off making that extra purchase."
Mr Thompson said concerns about world-wide stability were also playing their part, and there had been signs the market has eased in recent months.
"We have seen a slight fall off in some of the auctions that have been held this week where some of the vendors have been putting too high a price on and the buyers have said 'enough's enough' .
"It is an indication that it is possibly at a crossroads but there are plenty of buyers out on the market."
The survey also showed the city's median house price had fallen, dropping by $2000 between July and August, to $755,000.
Mr Thompson said the most likely scenario was that prices would go up over the next few months - but modestly.
Meanwhile, official figures show that residential building activity has fallen, which economists say is due to the pace of repairing earthquake damaged homes in Christchurch easing back.
Seasonally adjusted house building fell 1 percent in the three months to June compared with the previous quarter.
But total building activity picked up, thanks to a 5.2 percent gain in industrial and commercial construction.
The actual value of all building work totaled $4.1 billion, with residential accounting for 61 percent of that.
Some 59 percent of the total came from Auckland and Canterbury.
Statistics New Zealand said the volume trend for all buildings grew to a level last seen a decade ago in the June 2005 quarter, the previous series peak.