According to QV Valuations, the prices of the residential houses are once again on the increase, and are now almost at par with the prices prevailing last year.

The company, however, feels that this increase is temporary and is due to the demand being more than the supply.

The August index of QV, based on the market prices of the last three months, indicated the average prices to be down 2.8 percent.

A 5 per cent annual reduction was reported last month, which is an improvement over the last month's 7.1 per cent.

The national average sale price of houses increased to $385,426 in August from $382,758 as in July.

QV Valuations manager, Glenda Whitehead, said: "Sales activity in August was solid and the number of sales had picked up from last year's lows when plenty of properties were on the market."

The reasons for the sales to increase and the rise in prices have been the coming of the spring, and the restoration of the confidence of the buyers and shortage of listings. Nevertheless, Ms Whitehead cautioned that the rise in the prices is temporary and is not the beginning of the boom once again.

Ms Whitehead said, "If more properties come on to the market in spring, as expected, then the imbalance of motivated buyers and the shortage of quality properties could be corrected and values stabilize."

In the last three months, the rise of prices of the property has been in the main centers.

And, in July, there was a reduction in the annual prices, indicating an improvement to 1.9 per cent from 3.5 per cent.

There has been increase in the prices at the time of the sales, from $500,315 to $502,022; but, in comparison to end of 2007 prices, the current prices were 7.9 per cent less.

Ms Whitehead said: " The spring market might be more balanced in the middle and mid upper price brackets for homes in Grey Lynn, Mt Eden, Epsom, Remuera, Pakuranga and older parts of Howick, Te Atatu North and Te Atatu South and parts of Henderson and Titirangi."