Signs of recovery in the Auckland housing market continued in May, with real estate company Barfoot & Thompson reporting its best month's trading in more than two years.

The surge in Auckland housing demand that emerged at the start of autumn showed no signs of easing, the company said today.

Barfoot & Thompson's average sales price increased by 6.2 percent last month to $533,909, the highest average price for 12 months.

"There was real depth and strength to the market in May, with sales volume at 814 being one percent higher than in April and 58.1 percent higher than May last year," Barfoot & Thompson managing director Peter Thompson said.

"This was our best month's trading for more than two years in terms of achieving both high volume and high prices."

Last month's average sale price was equal to that in May last year, and it was necessary to go back 18 months to better prices, Mr Thompson said.

"It was also the third consecutive month when we sold more than 800 homes, a target we never achieved once last year."

Demand increased noticeably for homes in more established suburbs, with the company selling 57 homes in the $1 million-plus category, the highest number in one month for 18 months.

The Auckland market's main challenge was the low number of homes available for sale, Mr Thompson said.

In May, Barfoot & Thompson listed 1186 new properties, similar to the number in April and 14.9 percent lower than in May last year.

"Restricted availability is a factor contributing to the price gains being achieved," Mr Thompson said.

The average weekly rent fell in May to $379, a $20 drop, and the lowest for 19 months.

Along with an increase in the number of landlords seeking to use the company's property management services, the falling rents indicated demand for rental property was easing.

NZPA