Property market continues to pick up
Property sales in May were up 24% on the same month last year, figures from the Real Estate Institute say.
The total number of houses sold in May was 7,175 while the average time to sell rose slightly to 38 days.
The average house price rose more than 5% to $369,000.
ASB Bank economist Jane Turner, says shortages are driving prices up in Auckland and Christchurch, but not the rest of the country.
Ms Turner says the underlying trend shows a gradual improvement, helped by falling fixed mortgage rates, while she expects higher prices to encourage more building.
"We expect to see a continued pick up in house prices particularly in Christchurch and Auckland where supply pressures are most acute."
The Institute's house price index rose 1.7% in May compared with the previous month, and is 6.4% higher than the same month a year earlier.
Stronger demand and a lack of new listings is underpinning a rise in property values.
Quotable Value says nationwide values rose 1% in the three months to May and 3.9% for the year and it is now 2% below the peak experienced in late 2007.
Auckland continues its strong showing due to robust demand and low numbers of listings, and values are now 6.5 % higher than the previous peak in 2007.
Among the other main centres, Christchurch nudged past its previous peak, but the rest, Hamilton, Tauranga, Wellington and Dunedin lag their previous highs.
Most provincial centres increased in value.
Real estate agents in Auckland say low interest rates have lured first home buyers and investors into the market.
South and West Auckland have been pinpointed as both the cheapest and fastest growing regions.
Agents across the region say if the market is spared the financial turmoil hitting countries overseas, another property boom like that in 2007 could be around the corner.
Next story in New Zealand: Govt urged to act as house prices continue to rise
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