You should look beyond the newspaper headlines to understand some of what is driving these figures.
Auckland prices have got ridiculous, with average apartment prices in excess of $700,000 and average house prices of ~$1m. This then has a knock on effect to skew the overall picture of NZ house prices as a whole. This is like London and the South East of England driving the average price across the UK.
Auckland seems to attract Asian migrants in particular, which has attributed to the increases as personal wealth in that part of the world has increased and the Kiwi's obsession with owning investment properties does not help!
Like anywhere else though, NZ has pockets of high, low and average house prices. For example, a friend has just purchased a new 4-5 bed home on 1000 sqm with a pool in Rangiora, a lovely commuter town just outside of Christchurch, for under $700,000, about the same price as the average apartment in Auckland! That is for an above average property and so of course smaller houses with smaller price tags will also be widely available across NZ
Its all about perspective