Banks, the Government and the prospect of a capital gains tax are responsible for causing "uncertainty" in the housing market due to law changes and tighter lending, as sales volumes drop 12.9 per cent in the last month.

Real Estate Institute data out this morning cited "uncertainty around legislation and difficulty accessing finance" which it said continued to hit sales volumes throughout the country.

Bindi Norwell, REINZ chief executive, said: "At a time when sales volumes are normally very strong and total sales figures for the country are typically well over the 7000 mark, with 6938 sales this was the lowest number of properties sold for the month of March since March 2011."

Mortgage interest rates had never been cheaper but "the legislative changes on the horizon and the difficulty accessing finance are now really starting to impact the housing market in terms of sales volumes," Norwell said.

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The law changes she referred to were not just the possibility of a capital gains tax but also Residential Tenancies Act reforms demanding landlords to improve properties, the foreign buyer ban, abolishing letting fees and anti-money laundering moves.

Norwell hopes the tax issue will become clearer in the next few months and that volumes will then recover. But volumes usually drop in winter, she noted.

The median number of days to sell a property increased by two days from 34 to 36 last month compared to last March. In Auckland, it took five days longer to sell last month, from 37 to 42 when compared to the same time last year.

National median house prices rose 4.5 per cent from February to a record $585,000, up from $560,000 in March last year.

National median prices excluding Auckland were even stronger increasing by 6.7 per cent to $491,000 up from $460,000 in March last year, REINZ said.

Auckland median house prices fell by 2.7 per cent from the same time last year to $856,000, down from $880,000. Despite the year-on-year fall, prices in March were the highest Auckland has seen for three months, REINZ noted.

OneRoof.co.nz editor Owen Vaughan said: "The numbers do show skittishness in the market, and will add fuel to the uncertainty that's been building in Auckland since last year.

"But the fact that the drop in Auckland was only 2.7 per cent when sales volumes are down 18.2 per cent suggests that property prices are holding up better than expected.

"Although any slowdown in the market will be of concern to homeowners, and people will naturally want to compare what's happening here to what's happening in Australia, it's important to stress that the numbers do not point to a collapse," Vaughan said.

On April 3, Quotable Value's House Price Index showed national house values rose annually by 2.6 per cent and by 0.5 per cent in the three months to March. Auckland dropped 1.5 per cent in the year to March, 2019 and by 0.8 per cent this year to an average $1,039,917.

Also on April 3, Barfoot & Thompson announced it had sold 963 Auckland properties in March, more than double February's 474 but below January's 653. March's average sale price was $931,673, up on February's $918,496, Barfoot said. March's median sale price was $836,000 was well up n February's $801,000.

Unsold stock and new listings have ballooned.

Peter Thompson of Barfoot said last week the agency had 1571 new listings, the highest in four months. At the end of March, Barfoot had 4865 properties on its books, a level not seen since 2011.