There were 121 registered mortgagee sales in February, down slight from the 124 in the same months of 2009 and a 38% drop from January's 196 sales.

Terralink managing director Mike Donald said the improvement from January reflects a seasonal drop off that typically reverses in March. Preliminary figures for March indicate numbers will rise again from February.

"The recession is not over in the housing market yet," he said.

Some property investors have been left servicing mortgages on properties whose value has slipped below the level of debt. With interest rates set to rise and households still feeling poor, the appetite from property remains tepid.

Reserve Bank Governor Alan Bollard last week said he will raise interest rates in coming months though the scope of increases may be less severe than in previous tightening cycles. That's because of a wider gap, or spread between official rates and lending rates.

Real Estate Institute figures last month showed total residential sales edged higher in March from February, though the pace of the recovery is still subdued. Total residential house sales climbed 23% to 6,161 last month from February, though they were down 8% compared to March 2009, according to REINZ figures.

The national average median price rose to $360,500 in March from $350,000 in February.