Real Estate Institute figures out yesterday showed the number of house sales at a seven-year low. It has slipped to the lowest July and August levels since 2001, when today's real estate boom started.
About 10,000 houses were sold every month during this boom, but only 6660 and 6394 were sold in July and August respectively.
But prices rose in many areas and the national median of $345,000 in July crept back up last month to $350,000 - the same as May's record high.
Institute president Murray Cleland said August sales traditionally recovered before spring which was a prime selling period. But the latest figures were "surprisingly skinny".
Houses are taking longer to sell, from an average 31 days in July to 33 days last month. Auckland houses which took 29 days to sell in July now average 31 days, a third more than the 22 days needed to sell in August 2003.
Goldman Sachs JBWere research director Shamubeel Eaqub said the latest figures showed a poor market.
"These are the worst numbers we've seen for a long time. I didn't think it would be quite as bad as this, based on numbers from Barfoot and Thompson," he said.
That agency's figures showed the sales its agents made fell 15 per cent between July and August.
But in line with the institute figures, Barfoot's prices were rising. The average price went up from $546,773 to $552,480. Director Peter Thompson said volumes were down in July and August and the firm had noticed less activity in its 64 branches.
Mr Eaqub warned that a big volume plunge had an impact on prices. One followed the other but there was a delay.
"Volumes tend to lead prices by three months," he said.
Citigroup's director of economic and market analysis, Annette Beacher, said the continuing downturn in home sales was giving the Reserve Bank some relief that the trend in activity had cooled.
"Sales still remain above past cyclical lows and could easily rebound," she said.
Elevated house price inflation also reflected an excess of demand over supply.
Suburbwatch's property market analyst, Kieran Trass, said the property cycle was moving deeper into the early slump phase but the country had not yet felt the initial effects of any slump.
"We are still seeing some upward pressure on property values," he said, "although there are more signs that the five-year property boom is clearly nearing its end."