Looks like reality is finally hitting NZ in a couple of new headlines out today:

House prices 30 per cent over-valued, risk large fall - BNZ - 03 Apr 2008 - NZ Herald: New Zealand National news
House prices are overvalued by about 30 per cent, BNZ economists warn today.

They said no moves should be taken to increase the supply of houses when the market is diving.

The bank is stopping short of saying house prices will fall by 30 per cent but says on a number of different measures that is how much prices are above trend.

"We believe house prices risk falling by more than the 10 per cent we already presume for this year," BNZ said in a report.
And the investment community isn't fairing much better either:
NZ investment bank suspends payments - Yahoo!7 News
Another large finance company in New Zealand is in trouble, suspending all payments to its investors.

Lombard Finance and Investments says a downturn in the New Zealand property market has meant its borrowers cannot sell their properties and repay their loans.

The company will hold a meeting next month with secured debenture holders to try to stop further pay-outs. Lombard owes them more than $100 million and is due to pay investors more than $16 million.

The company says business confidence has dropped significantly over the past month. Lombard has stopped accepting money for new investments.