The Real Estate Institute says housing shortages in Auckland and Christchurch are driving up the median national house price to record highs.
The institute released data on Thursday showing the median house price in March reached $400,000 for the first time, an increase of $30,000, or 8%, since this time last year.
It says 8128 houses were sold in March, the highest number of house sales in a month since May 2007 and a jump of 23% compared with the previous month.
Real Estate Institute chief executive Helen O'Sullivan says Auckland and Christchurch account for 90% of the increase while price rises in other regions are much more modest.
Ms O'Sullivan says there is a real danger that prices in those cities are skewing perceptions of the overall market.
But she says Auckland and Christchurch are bringing confidence to the market which should spur construction activity.
BNZ chief economist Tony Alexander says housing shortages in Auckland and Christchurch will keep prices in those centres rising steeply for the next three years.
"In Auckland they talk about a shortage of 20,000 to 30,000 houses, needing to build 13,000 per annum. In my data I cannot find Auckland ever having achieved that rate of construction."
Ms O'Sullivan says outside of Auckland and Christchurch modest price increases will be more likely.
