Auckland's largest real estate agency group, Barfoot and Thompson, has reported that its average sale price fell 5.3% to NZ$497,479 in July from NZ$525,316 in June as sellers start to to adjust their price expectations.

This means the average house price sold by Barfoot has fallen 11.1% from its peak in December last year of NZ$559,803.

Barfoot and Thompson is the agent for about 40% of house sales in Auckland, New Zealand's largest real estate market. Its monthly figures are closely watched because they are the first to emerge from the market, ahead of the Real Estate Institute and Quoteable Value.

Sales volumes rose 13.1% to 629 in July from 556 in June, Barfoot and Thompson reported.

Barfoot and Thompson Managing Director Peter Thompson said the prices and volumes in July showed "vendors who need to sell are gradually adjusting to the market and lowering their expectations."

"While prices clearly eased during the month, the average was skewed slightly by a package of 87 apartments going unconditional during the month and reducing the overall average," he said.

Meanwhile, he said the agency's property management division reported that the average rent had fallen to NZ$384 a week in July from NZ$391 in June.

"There is a lot of rental stock available and some vendors may be choosing to let their properties rather than sell on the current market, but they need to understand that they may not be able to get as much rent as they had anticipated," Thompson said.

Meanwhile, an auction of 18 mortgagee properties by Barfoot and Thompson in Auckland today was able to sell just one of the properties. The one property to sell was a leasehold one bedroom apartment at 138 Anzac Ave near the University sold for NZ$47,000, a correspondent said.

There were three properties from the Meadowbank region with 4 bedrooms that were passed in with top bids of NZ$785,000, NZ$603,000 and NZ$681,000 respectively, which were at least 10% below their QV official valuations.

What's your view on what's happening with Auckland property prices? How much further can they fall? Are sellers starting to adjust their expectations?

What is needed for the market to clear?