Asking prices for Auckland homes hit a new all time high in April of $568,820 - the third high in eight months.
Data from the Realestate.co.nz NZ Property Report revealed Auckland house prices rose 2% from March. Chief executive Alistair Helm said the price rise is due to increased pressure in the Auckland market as new listings numbers fail to match strong sales.
"Every April, we tend to see a drop in new listings as the traditional New Year surge of activity finally starts to wane. The number of new listings is virtually identical to April last year, but what is different this year is that demand has remained high, with year-on-year sales up more than 20%."
Helm said the Auckland market remained massively undersupplied, saying he would go as far as describing it as a "chronic shortage."
While prices rose in Auckland the rest of the country saw inventory steadying, new listings maintain their seasonal levels and asking prices ease slightly from their steady rise over the last couple of months to a seasonally adjusted $423,832.
The new listings that did come onto the market in April resulted in a slight easing of inventory, which lifted 4% to 33.7 weeks in April. However, Helm said this remains 24% down on year earlier numbers and well below the long term average of 41 weeks supply.
"With such a demand for property, we may have expected the market to respond with a few more listings than have appeared, given the signals that the market is clearly favouring sellers," Helm said.
"This indicates that we are not heading for a property bubble, but rather that the market is balancing buyers' demands with sellers' expectations well."
ASB economist Jane Turner said the fall in listings was a concern as it suggested strong demand and rising prices were not encouraging potential sellers onto the market.
"Supply in the housing market remains low and we expect house prices will continue to lift modestly, particularly in Auckland and Christchurch where shortages have been most acute," she said.