UPDATED 2.43PM House prices are increasing at record levels, but the Government says price is out of its hands.

The latest Quotable Value report shows the average nation wide price has risen 5.6 percent over the past three months to $591,000, the fastest increase in the last 12 years, with the Auckland average now at $975,000.

Values are also up in Christchurch, but not to the same degree

Christchurch City homes increased in value by 3.6 percent year on year, and by 1.1 percent over the past three months, taking average price to $491,000.

That's well shy of the Auckland market increase of 16.1 percent year on year and the 12.4 percent in Wellington.

Skyrocketing house prices are being fuelled by investor activity.

QV spokeswoman Andrea Rush said there's evidence of speculation in the market.

"The share of sales to investors is now 46 percent of all sales in Auckland. We're seeing increasing evidence of properties being bought and sold within short timeframes, which is speculative behaviour."

Housing Minister Nick Smith said price is beyond their control.

"What we can control is the pace of construction and growing supply, and we're pulling every lever at our availability to grow that supply as fast as possible."

Meanwhile, John Key is hinting that the soon to be established Urban Development Authorities could be given the power to confiscate land for housing development to alleviate the problem.

However, the Prime Minister said that would happen rarely.

"If there is one particular point that's holding out what would otherwise be a very big development, most people would say it's not unreasonable to use those powers. But we're not looking to actively declare war on people who are private property owners."