National median price for homes static

The national median price of $350,000 was unchanged from February last year. Photo / Thinkstock

The national housing market staged a modest recovery in February compared with January but volumes were halved in earthquake-hit Canterbury, the Real Estate Institute says.

The median price of $350,000 was unchanged from February last year but was up $10,000 on January. A total of 4502 unconditional sales were reported, up 38 per cent on January and up 45 per cent when the Canterbury/Westland region was excluded.

But the number of properties sold is down 4.3 per cent compared with February last year.

Economists were not wild about the numbers.

Phillip Borkin of Goldman Sachs said the market would stay flat for a while. "We are not yet becoming housing market bulls and continue to see median house prices remaining under modest downward pressure until the second half of this year.

"However, we are starting to see the beginnings of a possibly better backdrop for the nationwide housing market," he said.

Chris Tennent-Brown of ASB said the market remained subdued.

"Buyers will feel in no rush, given the lack of price appreciation in the market over the past year. The market remains tipped in the buyer's favour, evidenced by the long number of days to sell a property at present," he said.

"We expect prices to remain down around 5 per cent to 6 per cent from the 2007 peak over the coming months. We also expect prices to hold up better in the regions with stronger population and wage growth over the year ahead."

The Real Estate Institute said the earthquake had affected the volumes for Canterbury and the national total, so caution was required in analysing the data.

Some sales reported as going unconditional last month might not complete if there has been substantial property damage and future sales are likely to be conditional on structural and geotechnical assessments, which will take time to complete. Inability to procure insurance cover was currently the single biggest impediment to transactions in Canterbury.

The institute said that a recovery in transaction volumes in Auckland and Manawatu/Wanganui in February was encouraging and Auckland's transaction volumes were marginally higher - by just one transaction - than in February 2009.

Buyers were still being cautious, the report said.