Annual house price inflation rose to 30.6% in July from 29.8% in June. 

However, the Real Estate Institute of New Zealand said the seasonally adjusted number of homes sold last month ebbed by 9.1% from last July, with sales outside of Auckland down 14.7%.

Overall sales were at 7,187 with Auckland accounting for 4,496 of those. 

While the index for Auckland increased 27.7% year-on-year, institute chief executive Jen Baird said the past quarter movements for the index had shown a slight easing in the rate of growth, “showing early signs of property values stabilising across the country".

Kiwibank economist Jarrod Kerr said heat from the housing market is becoming unbearable and the Reserve Bank will do more to extinguish the fire.  

Kerr said the ongoing and significant lack of listed property means it remains a sellers’ market and properties aren’t sticking around for long.

“However, the brakes are being applied a little harder to slow the market. Mortgage rates are rising as the RBNZ looks to hike the OCR. And lending restrictions are being tightened further.” 

In June finance minister Grant Robertson gave the Reserve Bank the green light to add debt-to-income restrictions (DTIs) to its tool box for regulating the banking industry.

"Our analysis detailed that debt serviceability restrictions, such as DTI limit, are likely to be the most effective additional tool that could be deployed by the RBNZ to support financial stability and house price sustainability," the central bank said.

"The analysis also demonstrated that any such restrictions would impact investors most powerfully while having limited impact on first-home buyers," it said.