Westpac economists predict more gloom for the housing market, ahead of the release of the Real Estate Institute of New Zealand's (REINZ) August house sales data tomorrow.
The bank's Weekly Commentary newsletter did not beat around the bush.
"There is no getting around the fact that the New Zealand housing market is weak. Net migration is slowing, upcoming tax changes are a clear negative, and floating mortgage rates are rising."
Westpac did note one offsetting factor in falling longer-term fixed mortgage rates, but still predicted further weakness in the housing market over 2010 and 2011.
"Anecdotes for the month of August point to lacklustre sales, a further lengthening in the days to sell, and continued price weakness."
REINZ's July house price index showed property sales fell to 4,411 from 4,575 in June and 6,014 in July 2009. It was the lowest sales month for a July since REINZ started collecting records electronically in 1992.
The median sales price in July fell to NZ$349,000 from NZ$352,500 in June, but was up from NZ$340,000 in July last year.
Days to sell lengthened to 44.6 days, the highest since March 2009, and the stratified house price index fell 1.2% in July.
REINZ is due to release its August house sales details tomorrow.