The Central Otago Lakes region has posted a 40% annual increase in house prices, underpinned by a gain of almost 20% in Queenstown, up to $818,500.
Across Otago, the median price rose 5% to $281,000, but South Otago prices were up 52% to $175,000 and North Otago up 11% to $253,000, on 27 and 62 house sales, respectively.
Monthly data from the Real Estate Institute of New Zealand showed the national median price up 10% to a record $506,000, while metro Auckland posted an 8.2% gain on May last year, rising to $835,000.
For the year to May, all residential house sales were $57.5billion, of which $5.9billion were in May.
The number of properties sold was 9075 for the month, up from 7989 a year earlier.
REINZ regional director Gail Hudson, in Queenstown, said the number of properties for sale had fallen more than 50% during the past six months, helping explain the rise in median prices.
"There are fewer first-home buyers active in the market, but more investors and very active attendances at open homes, despite the wintry weather,'' she said.
Median prices from a year ago rose 19.1% in Queenstown to $818,500 while in Central, median prices rose 16.2% to $508,500.
Queenstown prices were down almost 7% on April's high of $877,500.
Overall sales numbers across Otago rose 32%.
Dunedin numbers were up 37.8% on May last year to 259 homes, South Otago up 28.6% to 27 homes and North Otago up 12.7% to 64 homes.
REINZ's regional commentator in Dunedin, Liz Nidd, said buyers in Otago were experiencing the side effects of the drop in the number of properties for sale and first-home buyers were "moving quickly'' to secure properties.
"Investors, particularly out of Auckland are also very active,'' she said.
Mrs Nidd said Otago only had 11 weeks of housing inventory on hand going into winter, so the supply situation was not expected to ease "until the spring at least''.
ASB economist Kim Mundy said the REINZ data again showed Auckland was no longer the sole driving force of New Zealand's house price growth.
"Tired of being ignored, the regions continue to pick up pace,'' she said.
New Zealand's housing market activity was "increasing strongly on the back of robust demand''.
"Outside of Auckland, low interest rates and displaced Auckland demand is responsible for driving demand,'' Ms Mundy said.
She said the data did not change the ASB's view that the Reserve Bank will cut the interest driving official cash rate by 25 basis points in August and November, having last week held it at 2.25%.
Westpac senior economist Michael Gordon said it was notable that the rise in prices was not driven by Auckland, where prices were flat, but by the rest of the North Island, particularly Wellington.
