House prices up - but experts aren't convinced

Economists have warned against reading too much into fresh house sales figures showing big jumps in prices and number of houses sold.

ASB economist Jane Turner said although sales were up 40 per cent in February, this reflected the usual post-holiday bounce period.

Real Estate Institute figures for last month showed 5228 houses were sold, up from 3706 in January, and the national median price rose from $325,000 to $330,000.

Institute president Mike Elford said the figures showed activity had returned to the market.

But Ms Turner said adjusting for the seasonal pickup, volumes rose only 8.3 per cent following the previous month's 6.8 per cent fall. Volumes were 18 per cent below the levels of a year ago.

"We place little weight on this month's recovery," she said.

Mortgagee property sales are at an all time high, according to data compiled by Terralink from changes to property titles.

Terralink said its first mortgagee sales report was derived from legal registrations of actual mortgagee sales, giving a true picture of the mortgagee sales.

There were 191 registered mortgagee sales in December, the highest number in 15 years. This was up from 66 in December 2007.

Mortgagee sales were 4.4 per cent of all sales in December, up from 0.25 per cent in December 2007.

Goldman Sachs JBWere (NZ) investment research director Shamubeel Eaqub said the length of time it took to sell had increased from 59 days in January to 62 last month, suggesting a large mismatch between demand and supply.

"Prospective house buyers are able to take their time in a low-demand market.

Unwillingness to accept lower prices may also be keeping time-to-sell dates high."

Adjusted QV figures showed house prices were down 8.9 per cent for the three months to February compared with a year earlier.

Mr Elford said more people were asking about properties and prices were up in most of the regions surveyed.

The national median house price in February was $330,000, up $5000 on January's $325,000 and only slightly lower than the $337,500 median in February last year and $335,000 in February 2007.

The Real Estate Institute said February median prices were up in nine of 12 districts. The falls were in Auckland (down from $422,000 to $421,500) Taranaki (from $266,750 to $260,000) and Central Otago Lakes (from $457,500 to $425,000).