Sales volume is also strong. "House sales volumes have now eclipsed the levels of the mid 90s property boom with sales volumes up across both the South and North Islands over the previous quarter," says Nikolai Shipkov of Quotable Value.
Nelson was the star performer with house prices up more than 10% in the latest quarter compared with 8% growth in the previous three months. Napier was its nearest rival with 4.5% growth this quarter after 3.6% last quarter.
Hamilton and Waitakere house prices were up 2.9% but the greater Auckland area was below the national average with 2.4% growth. Wellington prices rose a modest 1.9%.
"There are a number of factors that have led to this continued growth including migration, the increase in rents, particularly in the main centres, house sales volumes and the fact that property continues to gain in favour as an investment vehicle," Shipkov says.
He expects the market to cool somewhat with the onset of winter but "with further interest rate cuts expected this year and if rents continue their upward trend, it is likely the market will sustain similar levels of overall price growth in the next quarter," he says.
The Reserve Bank cut its Official Cash Rate, from which floating mortgage rates are set, from 5.75% to 5.5% last month and is expected to cut it again by at least 25 basis points in June.
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