House prices have set new records and February was the busiest in 14 years, with 7964 properties sold as investors rushed to beat the new Reserve Bank lending restrictions.

Bindi Norwell, Real Estate Institute chief executive, said the market was setting "an unrelenting pace" because in February last year, just 6951 properties were sold.

Median prices nationally rose 22.8 per cent from $635,000 last February to $780,000 last month, setting a new national high, Auckland is at another all-time high and 12 out of 16 regions and 37 districts also set new records.

"The unrelenting pace of property sales continued in February, with a 14.6 per cent uplift on sales volumes compared to the same time last year - the highest number of properties sold for the month of February in 14 years," Norwell said.

Some of this uplift could be attributed to investors buying before loan to value restrictions reintroduced this month, she said.

The Reserve Bank has warned that the overheated housing market is at growing risk of a correction and it will re-introduce loan-to-value ratio (LVR) rules at the tougher end of expectations. The rules mean most investors will be required to have a 30 per cent deposit this month but that will rise to 40 per cent from May. Most other owner-occupier buyers will require a 20 per cent deposit.

LVR restrictions were axed last April so they didn't interfere with Covid-19 policy responses to promote cash flow and confidence in the face of the pandemic hitting.

Norwell said West Coast sales volumes were the highest in nearly 17 years, with a 58 per cent increase on the same time last year. The area's affordability and lifestyle reasons are being cited by agents there.

Excluding Auckland, prices increased by 19.1 per cent from $550,000 in February last year to $655,000 last month, REINZ said.

Auckland's median rose 24.3 per cent from $885,000 to $1,100,000, also a new record.

The REINZ House Price Index, which measures the changing value of property in the market, increased 21.5 per cent annually to 3657 a new high.

This is the first time the index has exceeded the 3500 mark and was the highest annual percentage increase in the HPI in 201 months since May 2004, showing just how strong the market was in February, REINZ said today.

Auckland values increased by 20.7 per cent to 3662.

Additionally, every region reached a new high on the index.

Owen Vaughan, editor of NZME-owned property listing portal OneRoof.co.nz, said: "The REINZ figures further support the trends we've noticed in the market since the start of the year. New listings on OneRoof for February were up 25 per cent on a strong January, and action in the auction rooms shows properties are selling well above their rating valuation and many cases well above the reserve. They are also selling quickly, with auctions in February frequently brought forward, on the back of some big offers.

"OneRoof's recent Property Report showed the extent of the heat in the market, with more than 50 suburbs across the country enjoying value lifts of more than $300,000 in the last 12 months. And while talk has increased about a slowdown in the market - and there are clear signs that we have passed peak growth - buyers and sellers shouldn't expect price drops in the months ahead, just a less crazy market," Vaughan said.

Earlier this month, Auckland's largest agency's sales volumes hit a 17-year record and more than half the places it sold last month were for $1 million or more.

Peter Thompson, Barfoot & Thompson managing director, said on March 3: "In February we sold 1124 properties and you have to go back 17 years to find a February when we sold more homes."

As well, 56 per cent of the homes sold in the month went for $1m or more, whereas last year, that category was only 40 per cent of monthly sales, he said.

The agency listed 1941 new properties last month but the rising supply did nothing to satisfy Auckland buyer demand or dampen price increases.

The average and median sales prices increased: average prices reached $1,075,408, up 0.7 per cent on January, and a median price of $1,010,000 was up 3.6 per cent in a month.

February's median price was the highest on record and $5000 higher than the previous record set in December, Thompson said.

"At month's end, we had 3416 properties on our books, the highest number for three months. This number, combined with the level of homes in the sales pipeline, will contribute to March likely being a strong sales month."

The Auckland market was now set to remain active throughout autumn.

Rural and lifestyle property activity in February was nearly three times as active as it was for the same month last year.

"Increased payout projections for dairy farms, combined with banks again lending on this type of property, has seen an increase in demand for dairyland. There is also strong interest in demand for land to plant trees," Thompson said.

But Westpac chief economist Dominick Stephens said this month house prices are still rising but the market is "past its peak", mortgage interest rates will rise and Auckland house-building is finally catching up with demand and the shortage will be zero by 2028.

Although he agrees that prices are now rising more rapidly than in 2003, and the boom has a way to run yet, he says that will all soon stop.

The market would slow in time because mortgage rates will rise and the shortage of housing is being rapidly reduced.

Eventually, house prices would fall 4 per cent in 2024 and 2025, Stephens forecast in Home Truths.