Housing prices in Auckland have set new records with unprecedented sales activity in March. The average price of a home in New Zealand’s largest city is more expensive than in Sydney.

Real estate agency Barfoot and Thompson, a real estate agency, has reported a record month for the housing market in Auckland. About 1,597 homes were sold in March. The agency handles the most home sales in the city.

Peter Thompson, the company’s managing editor, said March has always been the “most active month” for property sales. He added that the average sales price increased by 3.9 percent on February. The average sales price has soared to a record high of $776,729 (AU$762,866), reports New Zealand Herald.

Thompson said the amount is more than $17,000 higher than the previous record average price in Dec. 2014. “The median price at $711,000 increased by 1.1 percent over that for February, and is 9 percent higher than the median in Mar. 2014,” said Barfoot and Thompson’s managing director.

ASB senior economist Chris Tennent-Brown said the combination low mortgage rates, high consumer confidence and population growth had contributed to the rise in demand for houses. He added that the pick-up in listings has been “encouraging” but it may not be enough to balance the property market.

The economist believes the Auckland housing market still has supply constraints. Tennent-Brown said Auckland house prices will continue to feel the upward pressure. Barfoot and Thompson revealed that a quarter of homes sold in Auckland last March had a value of more than $1 million.

Thompson noted that buyers were not discouraged by record prices as the last two weeks of March ere also the highest trading in the company’s history. He said the sales activity in April would unlikely match the one in March but the relatively good options in the property market are to be expected.

New Zealand Reserve Bank governor Graeme Wheeler had a more conservative outlook about the country’s economy in a speech he made last February. He said he was concerned about the inflation in house prices that are based on the risks to financial stability and broader economy.

The RBNZ governor said although house price inflation has not become a major factor in recent years, the high rate could affect stronger spending and put pressure on consumer prices. Stuff reports that Auckland and Christchurch make up about half of New Zealand’s total housing with prices going up as high as 39 percent above 2007 levels.

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