More than 120 properties sold last month, making it one of the best months for house sales since May 2017.

New Real Estate Institute of New Zealand (REINZ) figures released this week show 121 properties were sold in March, a jump up from the 89 sold in February.

However, it is still down on the same time last year, when 135 properties changed hands in a month.

Rotorua's median sale price for March was $345,000, down from $375,000 in February and also down from $353,000 in March last year.

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Harcourts Rotorua sales consultant Hielke Oppers said the number of sales almost always rose annually in March, generally on the back of sales in January and February after the Christmas/New Year period.

"Sales in this period will often go under contract in late February but sell in March," Oppers said.

"If you look at figures for the past three years, there has been significant growth between the month of January and March."

He said a number of variables came into play when figures showed a median price drop.

"One of those variables could be investors deciding to sell rental properties before the end of the financial year, another could be recently introduced changes to capital gains tax on investment properties.

"In saying that, it doesn't take much to see a change in the median price. You will often see significant fluctuations, up to 20 per cent variation, in any given month."

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Oppers said overall, the Rotorua market remained very active.

"We still have more buyers than sellers which also contributes to a lower number of sales. In spite of the perception of some, this does not necessarily reflect a slowing of the market but more a slower number of homes being introduced to a market with a large number of waiting buyers."

LJ Hooker principal Malcolm Forsyth also said the increase in sales in March was not unexpected.

"People take a little time to get over the Christmas and holiday period, usually getting back into the market in February," Forsyth said.

"We expect the market to slow a little at the beginning of the year and then pick up in February with a flow on into March."

Forsyth said the drop in median price could be explained by the increase in sales of properties up to $400,000.

"Using our own sales as a barometer, there appears to be a lot more home buyers to the market which is very encouraging, I think it's fantastic to see."

He said the increase in sales up to $400,000, coupled with static sales in the higher bracket explained the change in median price.

"The Rotorua market remains strong, we do need more stock but, as I said before, it's really great to see first-home buyers coming back."

First National Rotorua principal Anne Crossley described the figures as interesting but exactly what was expected.

"Of the total number of properties sold, it is interesting to note twenty five of those sales were in the $300,000 to $350,000 range," Crossley said. "It is definitely first home buyers and investors driving the market.

"The great thing is when the sales figures are put into a graph, that as well as the expected healthy hump in the middle, the tails on either side do not flatten right out – there is still good activity in the upper bracket."

Crossley said it was also of interest to note the substantial drop in days to sell.

"In January the median days to sell was 37, in February it was 44 and in March 28."

Simon Anderson, chief executive of Realty Group, which operates Eves and Bayleys, said the figures were an accurate reflection of what was being seen in the market.

"Investor and first home buyer sales make up a good percentage of those transactions. In saying that, there is still strong interest in top end properties but we still have a shortage of supply there too."

Anderson said many first home buyers were from outside Rotorua which was encouraging for the city.