Increases were recorded in Auckland, Christchurch and Other South Island. Compared to February 2011 the REINZ Housing Price Index rose 2.7 per cent, and the National Index is now 3 per cent below the peak recorded in November 2007.
The Auckland index is now 0.7 per cent above the previous peak recorded in July 2007.
Westpac Bank chief economist Dominick Stephens said the strong upward trend in the housing market in February had been helped by "improving household incomes, low mortgage rates, and constrained supply."
"House price inflation remains relatively modest, and dominated by Auckland and Canterbury (the two regions with the most obvious supply constraints), but is still on track for our forecast of an overall 3.5 per cent increase this year."
Stephens said the pickup in housing turnover in itself was unlikely to rattle the Reserve Bank, which incorporated a stronger housing market in the March Monetary Policy Statement.
"Our concern is that the RBNZ may be underestimating the inflationary consequences of a housing recovery," said Stephens.
In its analysis of the February figures, the Real Estate Institute said that while the volume increase was significant, "it is worth noting that the February 2012 result is just 65.9 per cent of the 9,357 sales recorded in February 2007."
As was usual for this time of the year February sales volume increased by over 50 per cent compared to January. But on a seasonally adjusted basis the national total was up just 3 per cent.
All regions apart from Otago and Canterbury/Westland recorded double digit growth compared to February last year; Otago recorded single digit growth, while Canterbury/Westland's sales volume more than doubled compared to February last year when the market was impacted by the February 22 earthquake and its aftermath.
"The real estate market in February has built on the strong results in December and January with a 37 per cent lift in sales across the country compared to February last year and the highest number of transactions in a February month since 2008," said REINZ Chief Executive Helen O'Sullivan.
"While agents are seeing more activity and more positive sentiment from buyers in most places this is not translating into significant price increases. Agents in a number of areas continue to report listing shortages. Despite the increased number of transactions, buyers are remaining cautious with the days to sell measure down by just one day, and still above the long term average."
-NZ HERALD ONLINE
