Wellington house prices increased 1.9 per cent in the past month, according to the Real Estate Institute's housing price index, with listings becoming increasingly scarce.
However, REINZ figures out yesterday also showed that the gain for the past year is just 1.8 per cent, reflecting the earlier weak state of the market. The housing price index for the region remains 2.8 per cent below the peak.
REINZ chief executive Helen O'Sullivan said an increasing shortage of listings was becoming apparent across the region.
"Uncertainty in the public service sector [is] making owners cautious about listing their properties," she said. "Buyer interest is still evident and [sales] clearance rates are solid."
The housing price index nationally increased 0.6 per cent in September to a new record high, showing a gain of 5 per cent in the past 12 months. The index adjusts for some of the variations in the mix of properties sold, which can move the monthly median house price up and down more sharply.
The less reliable median price figures showed Wellington region prices up $20,000 or 5.3 per cent to $400,000 in September, compared with the same month last year.
"The trend in [Wellington] median price is solidly improving, though the trend in sales volumes continues to move more or less sideways," REINZ said.
REINZ said Hutt Valley, Upper Hutt and Western Wellington house prices had noticeably increased on September last year.
Wellington region sales volumes in September were up 11 per cent from a year ago to 573, though down on August this year when almost 600 homes were sold.
It took an average of 35 days to sell a home in the region, compared with 39 days in August.
Nationally, the median house price was up 6 per cent in the past 12 months to $371,000.
TD Securities head of research Annette Beacher said house price inflation had been climbing since July 2011. Concerns were rising about the rapid pace of price rises in Auckland, resulting from people leaving Christchurch and years of next to no new homes being built, she said.
The average days to sell fell from 46 in February to 33, "traditionally associated with double-digit house price inflation".
New Reserve Bank governor Graeme Wheeler would need to tell financial markets and policymakers how he would react, if at all, "to this surge in asset-price inflation", Beacher said.
The next review of the official cash rate is on October 25, though the central bank is expected to leave the cash rate at 2.5 per cent for some time. TD Securities expected the first move up in rates in March, while most expected a move later in April or June.
Meanwhile, extremely low levels of Auckland and Christchurch houses for sale were behind a fall in national house sales in September, says ASB senior economist Jane Turner.
REINZ said the number of national house sales fell 6.8 per cent to 5653 from August, although sales remain 8 per cent above the same time last year.
“We believe the dip in turnover in September is due to lack of supply rather than easing demand.”
Turner doubts there would be a meaningful rise in housing supply, outside of the Christchurch rebuild, given limited capacity within the construction sector.
Compared with the number of households in New Zealand, the monthly level of sales remained about 23 per cent below the average seen in the past 20 years, according to Deutsche Bank.
REINZ's O'Sullivan said the total number of new national listings had grown from August to September, but not enough to meet market demand.
“This means properties have turned over faster and prices have increased,” said O'Sullivan.