With the economic impacts from COVID-19 set to trigger a rise in unemployment and a drop of income for many, a leading economist says the housing market is also expected to take a hit.
While that's bad news for those selling their homes, for would-be buyers it comes as a silver lining to the COVID-19 pandemic.
"Most people like to talk the market up which is to the benefit of the sellers," economist Cameron Bagrie told The AM Show on Monday.
"Well, the buyers don't do too well out of that sort of commentary. What are we going to see over the next one to two years? Well, it's going to be coming more in the buyers' favour."
House prices rose in March for the fourth month in a row, though the number of properties sold fell, a drop experts blame on the impact of COVID-19.
And though it is expected that house prices will remain steady for the time being it is thought they could be down by 11 percent over the next year or two.
With less people in a position to buy property, many selling their homes will struggle to find a buyer.
Bagrie says just how much prices eventually fall depends on how high unemployment rises.
"People talk about low interest rates, people talk about loan-to-value ratio restrictions being relaxed - yes, they're relevant, but the big boy in town here is incomes," Bagrie said.
"Incomes have taken a pretty big hit, so I wouldn't be upbeat about the property market over the next one to two years."
Bagrie said some regions would be harder hit than others.
"I think Queenstown property prices are going to come back 30 percent," he predicted.
"They were down 20 percent within the GFC [global financial crisis] and the Asian crisis so this one looks worse than that."
The Queenstown Lakes' economy is predicted to shrink by 40 percent in the wake of the COVID-19 pandemic, with tourism at a standstill.
Unemployment in the district is likely to reach 25 to 30 percent, with Mayor Jim Boult saying late last month Queenstown looks to be "the most detrimentally affected district in New Zealand".
