Month-on-month house sales around Otago and in the separate Central Otago Lakes region have surged during February, up respectively about 30% and 80%.
Compared with February a year ago, the median price in the Central Otago Lakes region rose from $395,000 to $450,000; underpinned by Queenstown's median at $540,000, while Otago prices rose from $239,750 a year ago to $243,000, with Dunedin up about $10,000 at $268,000, according to monthly data released by the Real Estate Institute of New Zealand yesterday.
Otago's sales went from 196 in January to 258 in February, while Central Otago Lakes went from 34 to 61 during the same period.
ASB senior economist Jane Turner said housing demand had steadily lifted during the past year, reflecting increased demand from both owner-occupiers and investors.
"Improving labour market conditions, low interest rates and an increase in net migration inflows will continue to support housing demand over 2013,'' Ms Turner said.
She cautioned that while the Reserve Bank was likely to hold the interest driving official cash rate at the record low 2.5% until March next year, if housing market and credit demand pressures intensified further, there was a possibility the Reserve Bank would use macro-prudential tools, such as implementing loan-to-value ratios, during the next year.
REINZ chief executive Helen O'Sullivan said in a statement the national median price rose 7.6% to $382,000 compared with February 2012, but remained below the record $389,000 set last December.
"While residential real estate remains active, the rate of growth in the number of transactions is slowing despite prices being near record levels,'' she said.
Supply shortages in Auckland and Christchurch were the main constraint, reflected in double-digit price increases in those regions, she said.
Ms Turner said while the official cash rate was the most effective tool for dampening housing demand, during the coming year the Reserve Bank had to weigh up increased housing pressure against a high New Zealand dollar, gradual economic recovery, drought impacts and subdued inflation pressures.
