“Another risk has emerged on the horizon and that would be contagion from a more marked slowdown in the Australian housing market than is currently expected,” she said.

However, Craigs Investment Partners’ Mark Lister told The Herald it could happen but he believed a price decrease was unlikely in the current economic climate.

“It’s not my expectation that it will happen here, not while our economy is as strong as it is – but you’d be very naive to rule out the prospect of house prices falling.

“I think it’s entirely likely that you see house prices over the next four or five years much more subdued than they have [been],” he said.

Australia and New Zealand have similar economies and housing markets, given their trading with China and their similar mentality towards property ownership.

The housing markets in Australia’s main centres have boomed over the past decade but Lister said there would have to be a dramatic shift to alter the New Zealand market.

“You’d need to see something get ugly, like China have a major hiccup or us to have some sort of localised issue like foot-and-mouth disease,” he said.

Reserve Bank Governor Adrian Orr said a price drop was possible but not within the Reserve Bank’s projections.

“You could see a similar fall, that’s not in our projections though. It’s certainly within a realm of possibility, likewise you could see a rise,” he said.

Lister agreed and said if there was a decline, it was unlikely it would be larger than the rise the housing market has experienced.

“A 10 per cent fall in Auckland house prices would still see them a lot higher than where they were five, six, seven years ago.

“House prices go up and down, that’s normal. People shouldn’t panic about that,” Lister said.