The country's largest real estate agency says average house prices are starting to fall, and the inflated prices that were achievable last year are no longer realistic.
Harcourts chief executive Chris Kennedy said the agency sold almost 15% fewer homes in May than it did in May last year, and average prices are being affected by declining sales.
That is particularly noticeable in Auckland where the average price in May was below the average in May 2016, for the first time since sales started declining late last year.
The average price of Auckland homes sold by Harcourts in May was $947,809 which was well below the $1,024,317 benchmark set in April this year, and down 0.7% compared to May last year.
In Christchurch the slide in price has been even more severe, with May's average sale price of $498,370 down 10% compared to the average price of $553,114 in May last year.
"Vendors are starting to adjust their expectations when it comes to prices," Kennedy said.
"The inflated prices that were achievable at the very height of the market are no longer realistic."
And he expects that the fall in prices evident in Auckland and Christchurch will start to spread to other regions, although he doesn't expect a big decline.
"The new normal means that selling for top dollar is not as simple as listing your property any more," Kennedy said.
"Vendors need to work with expert sales consultants, be creative when looking at marketing platforms and realistic when it comes to price.
"Rejecting a good offer in the hope of a better one coming along is not a great strategy."
Click on the link below for Harcourts full sales report for May, with average selling prices and the number of homes sold in the major sales districts throughout the country: