Despite measures taken by the government to cool property market, house prices in New Zealand are still rising; with the property prices having surged 1.2 per cent in August.

The REINZ Housing Price Index surged 2.6 per cent; while house prices reported an increase of 1.6 per cent in past three months to August; which are just 6.2 per cent below their peak level in November 2007.

House prices in Auckland and Wellington surged 4.4 per cent and 7.5 per cent respectively; and fell in Christchurch by 2.3 per cent. Mike Elford, President of Real Estate Institute of NZ said: "It is early days yet, and we still need to be cautious in drawing conclusions from these trends."

The median house price in August stood at $346,750, as compared to $340,000 in July. ASB economist Jane Turner said that prices may go up in the coming times in the midst of partial recovery of the economy.

He further added: "The recent pick up in demand comes when listings have been very low, causing the housing market to become slightly heated at the minute."