"Sales prices are definitely starting to fall, but not dramatically," he said.
Sales volumes were down 33 per cent, from March's 1180 peak this year to 782 last month.
Sale prices are now down 7 per cent since their latest peak in December when they averaged $1,278,647 to May's $1,189,779.
Thompson cited a rise in the number of listings, modest sales and lower month-end listings which indicated the vendors removing their listings.
The agency had 3827 available properties listed for sale at the end of January, 4385 in February, 4816 in March, 4845 in April and 4701 last month.
"Auckland house prices are continuing their orderly retreat from their peak" just before Christmas, Thompson said.
"May sales results show vendors are accepting that if they want to sell, they must reappraise their price expectations while buyers are realising that prices are not falling off the cliff edge," he said.
The median price was $1,125,000 in May, 4.9 per cent higher than in May last year, 1.4 per cent lower than last month and 2 per cent lower than the median price over the previous three months, he said.
"The realisation by buyers that prices are edging lower rather than falling rapidly resulted in sales numbers for the month reaching 782, up more than a quarter on those for April. However, turnover remained lower than is normal for May," he said.
The agency got 1135 new listings in January, 1077 in February, 1994 in March, 1302 in April and 1416 last month.
Of the homes sold in May, 15.2 per cent were for less than $750,000, 9.2 per cent were for more than $2m and 2.7 per cent for more than $3m.
Rural and lifestyle sales activity increased between April and May with property sales numbers increasing two thirds to 40, for a combined sales value of $86.2m, the agency said.
Top end bare land and lifestyle building platforms have been attracting keen buyer interest, Thompson said.
The Herald reported on Tuesday how national house values had fallen 0.9 per cent in the latest quarter, according to two new reports, with even higher drops in some of our biggest cities.
OneRoof-Valocity and CoreLogic found residential property values in the quarter to the end of May down by precisely the same amount - 0.9 per cent.
OneRoof-Valocity said Auckland values were down 2.2 per cent or $34,000 in the quarter, Wellington down 2.9 per cent and Dunedin values fell 2.2 per cent.
James Wilson, head of valuations at OneRoof's data partner, Valocity, said: "Weaker market conditions are now evident across much of the country and across many property types. FOMO is most definitely gone, replaced by FOOP – fear of overpaying."
CoreLogic found widespread house price falls. Its index showed New Zealand down 0.9 per cent in the latest quarter. Wellington values showed the steepest decline, down 4 per cent. Auckland values fell 1.8 per cent, Hamilton 3.8 per cent and Dunedin down 2.3 per cent.
The quarterly fall of 0.9 per cent is the biggest drop over a three month period since the end of 2010, when the market was still in recovery mode from the Global Financial Crisis, CoreLogic said today.
Nick Goodall, CoreLogic research head, said the declines were particularly noticeable in the main centres.
Westpac has forecast house prices to fall around 15 per cent in two years but other banking economists are not picking such a steep drop.
