Westpac says the property market will be affected by the foreign buyer ban.

Property prices are slowing and the upcoming foreign buyer ban will make it worse, according to Westpac.

The bank's chief economist Dominick Stephens is predicting a price drop in some parts of Auckland and in Queenstown when the ban comes into force within the next few weeks.

However, he said it was hard to how much of a negative effect the ban would have.

"One reasonable starting point is Toronto's stamp duty on foreign buyers, which was so high that it functioned like a ban. Toronto house prices fell around 5 per cent soon afterward," he said.

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But New Zealand's foreign buyer ban had been watered down, and would still allow Australians and Singaporeans to buy houses in New Zealand, he said.

Foreign buyers would also be able to purchase 60 per cent of the units in new property developments of 20 units or more, pushing them into the apartment market.

SUPPLIED Dominick Stephens says apartments could soften the impact of the foreign buyer ban.

If there were enough new apartments to satisfy foreign demand, "the price impact will be a lot smaller than it would have been under a blanket ban".

Generally, Westpac is predicting that house prices will fall modestly over the coming few years, due to the combination of tax changes, slowing population growth and the foreign buyer ban.

Stephens predicted that the ban would hit hardest on Auckland's North Shore, the central city, Howick and Henderson-Massey districts, as well as Queenstown Lakes district.

"These are the places in which foreign buyers account for more than 5 per cent of sales at present."

CHRISTEL YARDLEY/STUFF In the Bay of Plenty, the average asking price slowed for the first time since January 2013.

However, he forecast a brief surge in the property market around New Year, if fixed mortgage rates dropped as it expected and the Reserve Bank eased LVR lending restrictions early next.

Westpac's forecast comes as Trade Me's August "asking price" data shows that advertised property prices have slowed for the third month in a row, although they were still 2.8 per cent higher than a year ago.

The national asking price was down 0.3 per cent on July to $630,600.

Growth was usually accompanied by new records, property head Nigel Jefferies said.

"That's not the case this time, instead we're seeing signs that the brakes are being applied across the country."

IAIN MCGREGOR/STUFF Queenstown-Lakes District is among the areas expected to be hit hard by the foreign buyer ban.

The downward trend has also been in seen in sales data. QV's latest House Price Index fell 1.6 per cent over the three months to August. Real Estate Institute figures for August show Auckland house prices are now down 2.6 per cent over the past six months.

Although prices usually slow in winter, Jeffries said government policies, unaffordable prices and rising rents were all having an effect, particularly on first home buyers trying to get a deposit together.

"For the first time in a long time," Auckland buyers were in a prime position as price growth and competition eased and there was more stock on the market. The average asking price fell 0.1 per cent last month to $895,050.

SUPPLIED Auckland house prices have hardly moved since July, according to Trade Me's Property Price Index.

In the Bay of Plenty, the average asking price slowed for the first time since January 2013, falling 0.3 per cent to $598,800 in August after a long period of solid growth.

In Wellington, the region's average asking price fell 0.3 per cent on a month earlier to $579,750, but "with less stock and growing demand we expect to see it bounce back pretty quickly".

Prices rose in areas outside Wellington city such as Upper Hutt, Porirua – up 18 per cent to $639,850 – and Masterton, while central Wellington prices were up 9 per cent at $684,950.