Expect house prices to fall for the next six months, ASB says - and another economist says its prediction may be too light.

The bank had earlier predicted house price inflation to peak this year at an annual rate of 8.6 per cent in June.

But it said the outbreak of coronavirus had "changed the game".

House prices would fall 0.5 per cent in the June quarter and 1 per cent in the September quarter, economist Mike Jones said.

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On an annual price change basis, he expected growth to slump from 6.5 per cent now to 1.8 per cent by December.

But Brad Olsen, an economist at Infometrics, said the situation could be worse than Jones predicted.

"We'd expect house price falls of between 5 per cent to 10 per cent over the next year, and there's obviously downside risks to this view as conditions continue to deteriorate further as the pandemic toll continues to grow. With the economy heading into a severe downturn, the stage is set for a housing market fall."

While the year had got off to a "flying start," that was all set to change, Jones said.

"The heat has evaporated. We will see things start to throttle back more or less immediately.

SIMON O'CONNOR/STUFF ASB said the coronavirus outbreak had "changed the game" for the housing market.

"The New Zealand economy is heading for recession and we have slashed our house price inflation forecasts accordingly."

Jones said house price growth would be zero by March next year - instead of 5.3 per cent, as it previously forecast.

"It's worth bearing in mind that the last four times New Zealand experienced or skirted economic recession, annual price inflation in New Zealand went negative.

"There are some cushioning effects this time around from current record-low mortgage rates, which could go even lower, a sturdy labour market and a starting point of strong excess demand. But risks are nevertheless to the downside."

He said the lack of supply to keep up with demand had not changed.

"There will still be a need for the buying and selling of homes."

Turnover would continue, he said, but at a slower rate as people held back and avoided leveraging up due to uncertainty.

Real Estate Institute chief executive Bindi Norwell said the experience of the global financial crisis could give some guide as to what might be ahead.

"It was different but still a global recession... prices went down 5.9 per cent but then bounced back within a year."

She said there was a bigger impact on sales, although turnover eventually recovered. "People tend to have a wait and see approach. We really don't know how long this is going to take. It is definitely going to have an impact but it will bounce back, it will recover."

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