The average house price in New Zealand has eclipsed $800,000, and a property expert says consistent government messages about the need to protect property wealth mean prices will continue to grow.
Property research firm CoreLogic's house price index rose 2.2 percent in January, with the average house price now sitting at $806,151.
Prices have risen 7 percent over the previous quarter and were up by 12.8 percent on a year ago - the highest annual growth rate since March 2017.
CoreLogic head of research Nick Goodall said demand continued to outstrip supply, which was propelling the market.
"Inventory remains tight across the country, although Trade Me recently reported that advertised stock levels had lifted year-on-year in our largest city.
"Signs are optimistic for stock to continue to come to market, with agent appraisals already back to the same levels as pre-Christmas. However, it must be noted that there would need to be an above-seasonal lift to match current demand, and for now that seems unlikely."
Goodall said consistent messages from the government about the need to protect property wealth meant prices would continue to grow.
The reintroduction of loan-to-value ratios (LVRs) next month at 20 percent for homeowners and 30 percent for investors would not be enough to take the heat out of the market, he said.
Goodall said this could lead to a further tightening of LVR limits by the Reserve Bank.
He expected the government to announce some form of housing policy at the end of the month to assist first home buyers and incentivise residential construction.
House prices by region
Christchurch saw the steepest rise in price values of all the main centres and the strongest monthly rate of growth for the city in the past 17 years.
Prices rose by 3.1 percent to $556,446.
"The quarterly (5.8 percent) and annual (9.0 percent) rates of growth are more modest than most other cities, but after years of very little growth in the South Island's largest city, the pronounced lift is significant and shows the pace of capital gains is accelerating," Goodall said.
In contrast to last month's sharp rise, prices in Tauranga saw modest growth of 1.5 percent.
The Kāpiti Coast recorded the strongest price growth over the month, with values increasing 4.5 percent to $779,925.