The lockdown drove national house prices down 6.5 per cent from August to September and Auckland house prices down 4.2 per cent.
Price rises in what was the seemingly unstoppable house sales juggernaut were halted by the pandemic and real estate agency activities being so restricted under September's level 4 and level 3 alerts.
Real Estate Institute data out today showed New Zealand's median house price fell from $850,000 in August to $795,000 last month.
Auckland's median dropped from $1.2m to $1.15m.
Sales volumes were down 37.9 per cent from 8673 transactions last September to 5385 last month. That was the fewest sales in September since 2011.
Auckland sales volumes fell 55 per cent from 2996 last September to 1338 last month.
Jen Baird, REINZ chief executive, blamed the lockdown when agents were barred from carrying on work except online or virtually.
"Various levels of lockdown across New Zealand have influenced activity in the real estate market this month lending to mixed results. We expect to see a rise in activity as restrictions ease further, especially in Auckland," she said.
The lockdown wasn't the only cause of the market turning so suddenly.
"Demand suppression measures introduced this year, recent moves by the Reserve Bank to increase the official cash rate and Covid restrictions to real estate activity are creating headwinds for house prices and we can see that the pace of price rises has slowed over recent months," she said.
New Zealand excluding Auckland returned to alert level 3 at the start of September.
Auckland's volume decrease was "significant", REINZ said, illustrating the impact of the prolonged lockdown on the region.
Sales volumes were down elsewhere between August and September: in Northland -33.5 per cent, the Waikato -34 per cent, Bay of Plenty -37 per cent, Gisborne -5 per cent, Hawke's Bay -21 per cent, Taranaki -22 per cent, Wellington -15 per cent, Nelson -48 per cent, Marlborough -24 per cent, Canterbury -30 per cent, Otago -20 per cent, West Coast -56 per cent and Southland -18 per cent.
REINZ said August house sale volumes fell 26.5 per cent as the national alert level 4 lockdown took its toll. Only 5753 properties were sold that month, down on last August's 7828.
That was the least number of properties sold in August since 2014.
Agents, vendors and buyers had 14 lockdown days last month, with activity severely restricted under alert level 4 which began just before midnight on Tuesday, August 17. Auckland sales suffered a 12.8 per cent drop from 2689 sales last August to 2346 sales last month.
Barfoot & Thompson's September sales dropped 34 per cent from August as the pandemic's highest-level alert took its toll. The agency sold more than 1000 properties each month since January but last month, volumes dropped to 666 sales. That is down on July's 1243 and August's 1020.
Peter Thompson, managing director, said Auckland sales were severely curbed by September's lockdown. New listings declined from the year's high in February when the agency listed 1941 properties to 977 new listings last month.