KEY POINTS:
Remember a year or two back when the dinner party chatter was dominated by what everyone's home was worth?
At the moment it's safer to stick to politics - property values have become a conversation killer.
Kiwis with unshakeable confidence that the residential property market always climbs - and that the boom started in 2001 was like some bottomless oil well - are starting to realise economists don't just spout hot air.
A Herald on Sunday analysis of Real Estate Institute house sales data for 2007 shows most parts of the country are into a "no-gain" phase.
Interest rates are biting, the economy and immigration are slowing and the ratio between income and house prices, now one of the highest in the world, can only tighten.
It's not an issue if you can handle the mortgage or you're buying and selling in the same market.
That's because history shows that, over the years, values will increase.
But history, like statistics, can be used selectively.
House values, like share prices, go backwards, and you'll know all about that if you bought and sold - or tried to - in the dips in the 90s.
Just sit out the dips and cash in on the peaks?
Nice theory and one that's worked for plenty, but people who are stretched are vulnerable in times of greater economic uncertainty: lose your job and you may lose your house through a mortgagee sale.
At the end of 2007, residential property as an investment was starting to look even more uncertain, and that will put further pressure on prices.
Why buy a renter (likely to be worth less than you paid for it in real terms in two or three years) giving a miserly 4 per cent yield and potential hassles when you can pull 9 per cent on a bank term deposit?
It's definitely a buyer's market. On all the indicators, prices have moved too far and the inevitable result for those who must sell is a value that falls short of earlier expectation.
Young New Zealanders who a year or two ago wondered how they could afford a house can stop panicking.
High interest rates are likely to be around for a while but flat and declining prices give them time to save for a bigger deposit and, perhaps, the opportunity to ride the future booms.
The dramatic drop in the number of sales in virtually every area surveyed tells a story in itself.
Would-be sellers with unrealistic ideas are getting the message - and it will become louder in 2008.
It will be a hard year for over-stretched households, and some investors will discover that buying wise depends a lot on timing and isn't necessarily a path to great riches.
The Reserve Bank puts it this way: "It seems that houses in New Zealand are now over-valued relative to the level that can reasonably be supported by household income."
In the circumstances, prices held up reasonably well last year, and a key indicator on the strength of the market, the median days taken to sell a property, stayed firm. In many areas it was better than in 2006.
The data on which our tables are based should be treated with some caution when it comes to individual patches because so many suburbs are merged in one grouping.
Some areas had so few sales they had limited statistical value.
But there were some shining lights last year, and none brighter than Ellerslie-Panmure in Auckland, where three-month media sales figures showed annual growth of 29 per cent.
Based on the institute's data (and with a wary eye on the relatively small number of sales in the suburban bracket), if you bought a house there for $395,000 at the end of 2006, it would now carry a value of $510,000.
But the Auckland City Council rating valuation, due in September, will give a better idea.
Second place went to Titirangi, where the three-monthly median house price shot up 21 per cent. But, again, the small number of sales there may have distorted the rosy picture.
Upper Harbour filled third spot, with 19 per cent growth, but it is hard to read too much into that with fewer than 300 sales over the year.
For a statistically-safe conclusion that not all was doom and gloom, head for North Shore's East Coast Bays - with 15 per cent price growth over 2007 - and Manurewa and Papakura, both up 13 per cent.
Who, in 2003, would have picked Manurewa to be the standout area in Greater Auckland over the next four years, with the median up 75 per cent?
So much for the spurters - what of the sliders?
Topping the list with an 11 per cent slip was Mt Eden-Epsom, and the prime North Shore suburbs of Milford-Takapuna looked similarly shaky, down 8 per cent over 2007.
The result is probably more a reflection of a drop-off in high-level sales than a sudden aversion to villas, leafy streets, and local beaches.
THE MOVERS
Percentage rise for the year to December 31 for Auckland property.
1. Ellerslie-Panmure: +29
2. Titirangi: +21
3. Upper Harbour: +19
4. East Coast Bays: +15
5= Manurewa: +13
5= Papakura: +13
Manukau Rural and Waitakeres not included because of low sale volumes.
THE DRIFTERS
Percentage change in year to December 31 for Auckland property.
1. Mt Eden-Epsom: - 11
2. Milford-Takapuna: - 8
3= City-Pt Chev: - 1
3= Devonport: - 1
Family sitting pretty
THE LOSERS:
Property values might have dropped in the pricey Mt Eden-Epsom area, but that's not bothering Lynette Fergio of Mt Eden's Prospect Terrace.
She and husband Damian bought their charming three-bedroom family home in the Auckland Grammar zone almost 13 years ago for $430,000.
Lynette said she'd lost track of what it was worth now, but a quick check on the Quotable Value website puts the value at $1.14 million.
Latest Real Estate Institute of New Zealand figures show values in the blue chip area fell 11 per cent last year.
Property experts contacted by the Herald on Sunday disputed the figures or said the dip was down to the rest of the market catching up.
"Mt Eden-Epsom is a solid location," said Chris Taylor, a director of The Joneses.
"I'd say the figures are a little bit of a correction... prices there inflated rapidly for a period.
"There were a lot of new migrants into the country and a lot of demand.
"Migration has now slowed significantly and it's reduced a little bit of the heat."
The Fergios, who have four children aged 6-13, have an 808sq m section, a lap pool and no plans to move.
Ellerslie winning race
THE WINNERS
Four years ago, Daron Brinsdon's friends laughed when he told them he'd bought a house in Ellerslie.
"There was a bit of a stigma about the area, it was seen as industrial," the 39-year-old said.
"I joked with them and said I thought it would become the new Ponsonby."
The latest Real Estate Institute figures suggest he's had the last laugh, with values in Ellerslie-Panmure soaring by 29 per cent last year.
Daron and his wife Lisa, 32, bought for $435,000 but estimate their three-bedroom, two-bathroom home is now worth $550,000-$600,000.
There is high demand for the area - which is close to the city, transport links and shopping at Sylvia Park.
"It's actually quite a central area, and I think people are starting to see the value in those areas now," said Chris Taylor, of The Joneses.
"It may have been undervalued in the past."
Daron and Lisa have landscaped and are renovating. They are planning to sell their home in four to five years.
The downside, they say, is lack of good mainstream schooling.
"There is a Steiner school and a Jewish school which are both very popular, but for mainstream schooling, it's not very good."
