With 11 of the 12 regions recording an increase in median prices, including three hitting new record prices, the data puts more pressure on the Reserve Bank to consider lifting the interest-driving official cash rate (OCR) to reduce demand.
For the second month this year, more than 400 homes worth more than $1 million each changed hands.
The 7714 houses sold in May were the most sold in that month in six years, and up 7.5% on May last year, according to Real Estate Institute of New Zealand data released yesterday.
ASB senior economist Jane Turner said housing demand had increased because of improved household confidence, a turnaround to positive net migration inflows, low interest rates and increased demand from investors.
''However, there is evidence that Auckland and Canterbury markets are supply-constrained and demand in these areas may be stronger than turnover implies,'' she said in a statement yesterday.
While the national median price was up only slightly at $392,000, three regions recorded new record median prices, with Auckland at $565,000, Canterbury-Westland at $360,000 and Nelson-Marlborough at $353,625.
About 82% of the $23,000 increase in the national median price, compared with a year ago, was attributed to activity in the Auckland and the Canterbury-Westland regions, REINZ chief executive Helen O'Sullivan said in a statement.
Ms Turner said the Auckland and Canterbury markets remained undersupplied and that continued to place strong upward pressure on house prices in those regions.
More concerning for Ms Turner was the rise in house prices outside Auckland and Canterbury, where supply constraints were less of an issue.
''The acceleration in house-price inflation in these areas indicates it is becoming increasingly appropriate for the Reserve Bank to lift the OCR from very low levels to ease demand,'' she said.
The highest median prices were $680,000 in North Shore City and $618,000 in Auckland City, followed by Queenstown, which was up 8.2% at $568,250.
The entire Central-Lakes median price was up 11.5% on a year ago, at $465,000. Ms Turner said at present the Reserve Bank was reluctant to increase the OCR, given the elevated trade-weighted New Zealand dollar and low inflation pressures.
She noted the Reserve Bank had recently indicated it was ''strongly considering'' placing restrictions on high loan-to-value lending, but that would not affect the entire market.
''While blocking access to credit might choke off demand in some instances, it is unlikely to have much impact on demand for prospective buyers in strong capital positions, particularly while interest rates remain at very low levels,'' she said.
Otago's median price rose 1.5% on a year ago from $229,000 to $232,500, while Dunedin dipped slightly from $250,00 to $248,000.
Ms O'Sullivan said there was a ''significant shortage'' of listings, the number of residential properties available for sale falling back to levels last seen when house prices fell in 2008-09''There are too few houses coming to market in the Auckland region, creating an imbalance between supply and demand and driving up house prices at both the regional and national level,'' she said.
REINZ was seeing evidence of listings shortages across the country, only a handful of regions reporting sufficient supply of properties for sale, she said.
''With the winter months now upon us, there is unlikely to be any easing of the listings shortage until spring,'' Ms O'Sullivan said.
The May numbers
• Nationally, the number of homes sold in May 2013 worth more than $600,000, and in the next bracket of those worth more than $1 million, both leapt about 35% from May 2012. $600,000+, from 1039 to 1406; $1 million+, from 303 to 407.
• Otago, May 2012: 254 homes sold (median $229,000); May 2013: 285 homes sold(median $232,500).
• Central Otago Lakes (incl Queenstown), May 2012: 124 homes sold (median $417,000); May 2013: 122 homes (median $465,000).
• Queenstown, May 2012: 65 homes sold (median $525,000); May 2013: 66 homes sold (median $568,250).
Source: REINZ
