"House prices in Auckland are increasing faster than other regions due to the imbalance of new supply to meet demand from the increasing population.
"In the short run, while interest rates stay low and builders aren't building, houses prices will continue to rise in Auckland."
As low interest rates encouraged first home buyers to enter into the market, this in turn was putting pressure on the housing market, Hargreaves said.
Real Estate Institute of New Zealand (REINZ) released figures yesterday showing the national median house price increased from $370,000 in August to $371,000 in September.
In Auckland, the median house price moved up 1.9 per cent compared to August. That marked a new record median price of $515,000.
Hargreaves said a rise in the national median house price over the past three months was offset by a $6.25 increase in the average wage and a fall in the average monthly mortgage rate from 5.99 per cent to 5.84 per cent.
Despite Auckland's overall yearly decline in affordability, the region has seen a 2.7 per cent improvement in the last three months.
During the quarter ending August 31, 2012, national affordability improved by 2.8 per cent, and eight regions showed improvements.
The biggest rises were in Manawatu/Wanganui (9.4 per cent), Hawkes Bay by (8.4 per cent), and Waikato (4.9 per cent).
Northland became less affordable by 3.7 per cent, followed by Wellington (1.4 per cent), Southland (0.5 per cent), and Canterbury/Westland (0.3 per cent).
The least affordable region in the country is Central Otago/Lakes, which is 134 per cent higher than the all districts national index.
Auckland (129 per cent) and Nelson/Marlborough (99.7 per cent) were the next least affordable. Southland (57.3 per cent) is the most affordable region in the country to buy a home.
Quotable Value, the government valuer, will release its monthly property values this afternoon.
