The relentless high demand for property in New Zealand has driven the inventory of homes for sale to its lowest level in four years, while once again pushing asking prices up to a record high, says Realestate.co.nz.

Data released today in the NZ Property Report - a monthly report of housing market activity compiled by Realestate.co.nz - showed that the national inventory of unsold homes dropped to just 32.4 weeks in March (seasonally adjusted) - a 10% drop from the previous month and a 31% drop on the same month last year.

Inventory - which is measured in terms of the number of weeks it would take in theory to sell all unsold housing stock on the market - has seen a significant drop-off over the past six months, which has pushed it well below the long term average of 41 weeks, says Alistair Helm, CEO of Realestate.co.nz.

"The high number of sales in February 2012 has squeezed inventory to a point not seen since February 2008. If we contrast where we are today with the same time last year, there was not one region where inventory was at or below the long term average," says Mr Helm.

Helm says the increased pressure on the market due to the continued high demand for property has also led to yet another record average high for asking prices nationally, which topped out at $429,865 in March, up once again from the high of $426,575 inFebruary.

Helm says the high was driven by record level average asking prices seen in Canterbury ($383,395) and the Waikato ($380,315), with Auckland remaining a significant contributor, with an average asking price of $559,369 (seasonally adjusted).

"There is still no shortage of buyers, so sellers are continuing to respond to the demand with a growing confidence about their asking price. While the inventory remains low, the market will continue to lean firmly in their favour."

Helm says that while the numbers of new listings in March were steady in comparison to the previous month, maintaining the traditional post-New Year surge, there were still insufficient numbers to meet the demand.

"While the numbers of new listings that we forecast would come onto the market this year is matching the reality fairly closely, it doesn't yet look like they will be enough to stem the growing shortage if demand continues."