KEY POINTS:
Anyone watching house prices shoot up over the past decade will hardly be able to believe the latest figures out from the Real Estate Institute.
The last year has seen virtually nil movement in prices - unthinkable in the heady days prior to 2007.
House prices actually fell 0.7 per cent last month from January, and rose slower for the year than the rate of inflation, according to new REINZ figures.
The residential property market had reached a "tipping point", with the percentage annual growth rate on the verge of moving into negative figures, REINZ said publishing the figures today.
They show the national median price easing back from $340,000 in January to $337,500 in February, leaving it just 0.74 per cent ahead of the February 2007 median of $335,000.
New Zealand's annual inflation rate, as measured by the Consumer Price Index, was 3.2 per cent in the year to December.
REINZ national president Murray Cleland said that if prices tipped into reverse for the balance of this year it would have huge economic and political implications.
"Treasury has already begun to talk about the impact of falling property prices while at the same time the Reserve Bank is talking about maintaining the current 8.25 per cent official cash rate until 2009," he said.
"It might be testimony to the independence of the central bank, but for a government to be going into an election year with potentially falling property prices and rising mortgage interest rates, is not a good look."
A heartening aspect of the February figures was a rise in sales to 6356 from 5186 in January, although the latest figures were still a long way behind February 2007 sales of 9357, Mr Cleland said.
It was not yet conclusively proven that the market had gone into retreat.
Around the 12 real estate regions the pattern was unclear, with six rises and six falls.
Several of the regional price movements had not followed a clear trend and had to be assumed to be partly a result of relatively low sales levels affecting median prices, he said.
The Auckland median was down 0.7 per cent from a year earlier to $427,000, although Waikato/Bay of Plenty had a 7.4 per cent annual increase to $333,000.
Wellington rose 1.4 per cent to $375,800 from February 2007 to last month, while Canterbury/Westland was up 7.7 per cent to $320,000.
The biggest annual fall was in Northland, with an 8.4 per cent fall to $284,000. For the month Northland lost 15.5 per cent from $328,000 in January.
The largest annual gain was in Southland, where the median rose 21.8 per cent to $201,000.
- NZPA