New Zealand property values could drop by 12 percent in the next three years, economic forecasting agency Infometrics predicts.
There were several risks hanging over the economy, despite the economy being in good spirits, the agency said.
Those with mortgages on Auckland properties looked particularly vulnerable to likely interest rate rises, the organisation said.
Chief forecaster Gareth Kiernan said growth would not continue at the rapid rate currently enjoyed by property owners.
The 2017 economy looked good, especially for construction, but international interest rates, retail rates and longer-term mortgages rates were rising.
"You think about the scenario over the next couple of years, as interest rates start to rise, at the same time we're likely to see net migration pulling back from it's peak as well, conditions for the property market are not going to be so favourable."
Higher interest rates would stretch people in Auckland who serviced big mortgages, he said.
"It could knee-cap the market, or at least slow the market down."
Affordability was not such an issue outside of Auckland, he said.
"We could be building at fairly rapid rates around some of those areas at the same time as demand is easing, so that is a recipe for some sort of oversupply to come through and prices to pull back."
But ANZ's chief economist, Cameron Bagrie, said it would take a recession and a complete halt in migration to spark a fall in property values as rapid as Infometrics predicted.
Mr Bagrie said a 12 percent drop was unlikely.
"The housing market is going to moderate, it's going to slow, it's going to ease up but I think it's pretty hard to engineer at the moment a dramatic-style fall, unless we see the New Zealand economy testing with the idea of an economic recession, which I don't think is on the cards any time soon."
The fundamental shortage of property, particularly in Auckland, would keep house prices firm, said Mr Bagrie.
"When you've got a shortage, the prices remain firm or go back up and that's the real tension point we have at the moment.
"The traditional levers, such as interest rates and credit growth, are telling me the market is going to slow down pretty aggressively, but we've still got an outright shortage out there," he said.