The number of new houses listed on market in July meant the number of sales nationwide in September dropped by three per cent, year on year, REINZ says.
That is the lowest number of properties sold in a month since January this year, and the lowest for the month of September since 2011.
REINZ Chief Executive Bindi Norwell said July's listings were down 5.4 per cent year on year and there was an all-time low level of listings in seven regions.
"There simply weren't as many properties for sale resulting in a very quiet start to spring," Ms Norwell said.
While volumes were down, prices were up in many parts of the country, apart from Auckland, which was steady.
In total, 14 of 16 regions saw an increase or no change in the median sale price, with Taranaki and the West Coast seeing a slight drop.
Prices in Northland, Gisborne, Hawke's Bay, Manawatu/Wanganui and Nelson are now at or equal to their record high median price.
"With our population growth and demand for properties continuing to exceed the supply of housing stock, prices are likely to continue increasing in the short to medium term," Ms Norwell said.
"In fact, new research issued by AUT earlier this week suggested that at our current rate of supply we won't reach demand until the mid-to-late 2020s.
"This means that price pressure could well be an issue for some time – particularly in our more densely populated cities."