Sellers are being forced back down to earth in terms of price expectations if they want to shift properties, amidst sagging sales.
Asking prices fell 4% to $407,349 in May from $422,520 a month earlier, while sales in April (the latest figures from REINZ) are down 16% from the same month a year earlier, according to Realestate.co.nz's latest Property report.
Asking prices are also now 5% below the market peak in October 2007 (at that time $429,033).
The fall in asking prices of new listings coming onto the market in May indicates that the state of the market is driving a behaviour amongst new sellers to price property to meet the market and also opens up opportunities for buyers.
"Sellers with new listings recognise the need to be aggressive on price with the large volume of property available," says Realestate.co.nz chief Alistair Helm.
"While we've not seen a deluge of cheap property for sale, it does appear that we've peaked on price and there's an opportunity here for buyers. Sellers are hunting them out using price as leverage to beat the competition."
The report also notes that there is no evidence the slowing of current market conditions has anything to do with the Budget announcements made on May 20.
Of the 19 regions the report monitors, seven did show asking price increases, although these were outside the three main centres of which Auckland set the mood with a 2.5% fall in asking price as compared to the recent three-month period.
The number of new listings coming onto the market has also slowed, down 4% from April to 11,733. However, despite May traditionally seeing a seasonal slowdown, new listings are up 17% compared to the same month last year.
The inventory of unsold houses, measured by how many weeks of sales it would take to clear the market, fell to 46.9 weeks seasonally adjusted, down 9% on April's 51.6 weeks.
"The inventory of unsold homes had been rising steadily over the past 11 months, however for the first time the trend has halted," the report says, key contributors to this being the slowing of new listings and sluggish sales.