Wellington's property boom continues to sizzle, with median house prices surging to a record high of $480,000 as competition for dwindling housing stock gets fierce.

Latest Real Estate Institute (REINZ) figures show the median price for the region rose by $66,625 – up 16 per cent compared with September 2015.

Earlier this month, QV figures revealed Wellington's house price growth had outstripped Auckland for the second month in a row.

The Wellington region had the lowest level of properties available for sale in the country, with under seven weeks' supply.

REINZ defines the Wellington region as extending from Wairarapa across to Otaki and down while Wellington city fit generally within the bounds of Wellington City Council.

The number of houses for sale across the region had dropped by up to 40 per cent, according to REINZ Wellington regional director Euon Murrell, which was pushing up prices as homes attracted multiple offers and fierce competition.

Spring was usually a popular time for sellers to put their homes on the market, but that was not happening this year.

"Why? If I had a crystal ball I'd tell you," Murrell said.

Auctions in Wellington had jumped 235 per cent compared with September 2015, albeit off a small base, while they fell by 4 per cent across the rest of the country.

"This, combined with the shortage of listings on the market, is leading to premium prices being achieved," he said.

Westpac senior economist Satish Ranchhod said house prices in Wellington had grown at the fastest pace in the country over the past year, driven by very low interest rates.

"For sellers this is positive because you're going to get a high level of return on your home. For buyers, it's a bit of a mixed picture – they have the advantage of lower debt servicing costs due to low interest rates, but at the same time they'll be facing higher purchase prices and bigger competition due to low housing supply."

Prices outside Auckland have hit a record median high of $400,000.

The REINZ figures were released at the same time as a Massey University report, which said a gap in affordability between Auckland and Central Otago and the rest of New Zealand, at 62 per cent and 61 per cent, was reaching "unprecedented" levels.