The housing market is teetering on the edge, with the question being, how far will it fall, according to Quotable Value Limited.
QV said house prices were showing the first signs of fragility as level 2 lockdown protocols allow for the property market to return to a new normal.
The QV House Price Index for May showed the average value nationally increased 2.4 percent over the past three months, down from 3 percent in April.
The average value is now sitting at $739,539.
QV general manager David Nagel said a May bounce in sales volumes was likely the result of pent-up demand from six weeks of lockdown.
"We are now seeing buyers exercising caution with many expecting greater volumes of listings to come on stream later in the year as the full impacts of the economic downturn start to bite."
He said a disconnect was developing between buyers and sellers amid declining sales volumes.
"Sales prices occurring week-on-week over the last three or four weeks has generally been at a slightly lower rate than what we were seeing for those same types of properties prior to lockdown.''
Nagel said QV had assessed it to be about 5 percent but the data was inconclusive.
"We don't have a lot of transactions that we are able to really analyse, to really hang our hat and shout out from the roof-tops, but we are very confident that when we look at the national market that there has been a decline of around about 5 percent so far over a relatively short period of time over the last five to six weeks.''
He said more listings were likely to gradually come on stream after the cushioning effect of the government wage subsidy ends and bank mortgage holiday periods expire.
"Unfortunately, this will be when the full impact of the pandemic will be reflected on real estate values."