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Applications for mortgages were down by more than a quarter last year - yet another sign that the property market has slowed.
Credit reporting agency Veda Advantage said there was a 27 per cent decrease in housing loan applications last year compared with 2006.
The slowdown continued into January, when there were 14 per cent fewer applications than in January last year. Veda's figures also showed the largest decline in mortgage inquiries by age group was among 30 to 40-year-olds - classic first home buyers - with a 26 per cent drop.
Veda said the figures were evidence of the extent to which the brakes had been applied to the housing market.
The Real Estate Institute said the number of house sales hit a seven-year low in January at 5186, down from 7566 sales a year earlier.
The median sale price dropped to $340,000 in January from the peak price of $352,000 in November.
Building consents for new houses fell last year to their lowest level in six years.
Veda's country manager, John Roberts, believed the drop in home loan applications was caused by a slowdown in the housing market, and homeowners taking out longer fixed-term mortgages.
He said five-year fixed rates - around 9.3 per cent compared with 9.7 per cent for a two-year fixed rate - had gained in popularity.
"So therefore not as many people are going back to market to refinance because they've locked themselves in to longer deals."
The ASB's head of retail banking, Ian Park, also said the number of home loans written and mortgage inquiries was down.
Two-year rates were still the most popular, but more people were taking five-year fixed mortgages.
Two-year loans once accounted for about 80 per cent of the market, but that figure was now more like 60 to 70 per cent.
Mr Park said the Veda figures did not give a truly accurate picture of the home loan market, as they did not capture everyone who decided not to move house but to extend the mortgage and renovate instead.
But a Westpac spokesman said the Veda figures reflected its view of the housing market.
"We are aware of people downsizing their property investment portfolios, taking the pressure off as higher interest rates affect returns.
"At that same time those with funds, who previously might have looked at property are perhaps biding their time, tempted to keep cash in bank term deposits that are regarded as a safe haven," he said.
Massey University's senior lecturer in property, Susan Flint-Hartle, said constant comments on the property downturn could help drive a slump.
"Good property in good locations is always going to maintain its value, and it won't be hit nearly as hard."
But she added: "I wouldn't do much personally in this market, I'd rather take a wait and see attitude."
