Real estate agents say fears of a recession among potential home buyers is a key concern, and they're moving away from the market as a result.
It comes as the Reserve Bank is predicted to deliver another couple of equal record-high 75 basis point interest rate hikes early next year to try and tame skyrocketing inflation.
In a Real Estate Institute of New Zealand survey by independent economist Tony Alexander of 555 agents across the country, conducted in November, a net 39 percent reported seeing fewer people at auctions and 48 percent said they weren't seeing as many people at open homes.
First-home buyers were also pulling back, the results showed, with 16 percent of real estate agents saying they'd seen fewer trying to get on the ladder.
Eighty-nine percent reported buyers being worried about rising interest rates.
In terms of fear of missing out, or 'FOMO', it was virtually non-existent. Just 4 percent of real estate agents reported seeing FOMO among buyers in November - a marked drop from the net 90 percent highs of this time last year.
Aligning with figures showing nationwide house prices on the downward slide, a record 74 percent of real estate agents reported declining prices in their area.
Alexander's report said this was up significantly from 45 percent in October.
"The Reserve Bank's cash rate increase and words of warning about recession have had an immediate impact on the real estate market," the report noted.
"Buyers remain concerned about high-interest rates, access to finance and prices falling after buying."
Following the record-breaking November 23 official cash rate hike and recession prediction, investors have also pulled away from the market, results showed.
Less than 10 percent of real estate agents reported an increase in appraisals from existing homeowners - a figure in line with falling property listings.
And there remained "a lot of water to go under the bridge" when it came to New Zealand's retreating housing market, Alexander said in his earlier economic newsletter.
That included uncertainty around where interest rates might head. Alexander predicted the official cash rate wouldn't hit its cyclical peak of 5.5 percent for another four months.
"Don't look for certainty when thinking about where your borrowing costs are headed," he said. "But do be aware that we are in a period now when [the] policy is still tightening but underlying economic activity and inflationary pressures are already weakening but are not readily apparent in the data as yet."
