National house prices at record high + infographic

Residential real estate prices climbed to new a new national median in March. Photo /APN

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank's restrictions on low-equity mortgages continue to weigh on sales of cheaper property.

The number of houses sold by real estate agents fell to 7,315 in March from 8,128 a year earlier, according to the Real Estate Institute of New Zealand. The number of properties sold below $400,000 slumped 21 percent to 3,155, accounting for about 43.1 percent of all turnover compared to 49.7 percent a year earlier.

Sales of houses between $400,000 and $600,000 fell 8 percent, while housing turnover between $600,000 and $1 million gained 9.4 percent to 1,616 and $1 million plus properties climbed 21 percent to 597. The top two brackets of higher value properties made up about 30.3 percent of turnover, compared to 24.3 percent a year earlier.

The national median sale price rose 10 percent to a record $440,000, and was up $25,000 from February. The REINZ stratified housing price index, which smooths out peaks and troughs, rose 3.4 percent in March, and was up 9.2 percent on an annual basis.

"There are clear signs that the national sales volume trend is easing, continuing the trend that began last November," chief executive Helen O'Sullivan said. "Despite the easing trend in volumes, the median price continues to reach new highs, however this may be due to the dominance of Auckland and Canterbury in the sales data and a noticeable shift in sales towards high value properties."

House sale volumes have slowed since October last year when the Reserve Bank imposed restrictions on the level of mortgage lending banks could make on a deposit of less than 20 percent. Governor Graeme Wheeler put the limits in place in an attempt to slow the housing market, which was bubbling away, without having to increase interest rates for fear of fuelling demand for an already elevated currency.

Since then, Wheeler has lifted the official cash rate a quarter-point to 2.75 percent and anticipates raising the benchmark rate a further 2 percentage points over the next two years, with the next increase expected at the monetary policy review on April 24.

Today's REINZ figures showed Southland and Central Otago Lakes were the only regions of the 12 surveyed to report an increase in sales.

Auckland sales fell 9.6 percent to 3,036 in March, while the median sale price climbed 13 percent to $637,000. Canterbury/Westland sales fell 4.3 percent to 948, with a 12 percent increase in prices to $401,000.

REINZ's O'Sullivan said the level of stock in Auckland and Canterbury was low, and that the data suggests "there are not enough homes to available to meet the demand from potential buyers."

The average number of days to sell slowed two days to 33 in March from a year earlier, though was eight days faster than in February.

Westpac chief economist Dominick Stephens said house sales remained low in the REINZ's latest housing market figures, and the number of days required to sell a house rose slightly, indicating that the housing market remains subdued.

"The jury remains out on the trend in house prices," Stephens said.

See the full breakdown of the latest stats, including regional changes here: