"The growth in house sales held firm in September at 39% per annum," says Mike Pero Mortgages Chief Executive Shaun Riley.

"The median house price rose to $350,000, up 6.1% on September last year, and just 0.4% below the peak recorded in November 2007. It would be fair to say things are looking more promising in the housing market."

The Mike Pero Mortgages-Infometrics Property Cycle Indicator climbed to a positive
6.99 in September, from 6.66 in August. The Property Cycle Indicator is a sensitive measure of the housing market and includes three main factors: changes in the number of houses sold; changes in price; and the time taken for houses to sell.

The third measure of the Property Cycle Indicator, the time taken for houses to sell, eased to a two-year low of 33 days in September, one day fewer than in August.

"Once again the two main North Island cities of Auckland and Wellington are showing strong signals and are leading the market according to the Property Cycle Indicator," says Riley.

Wellington led the country with a PCI of 8.41 (from 7.79 in August) and Auckland not far behind with a PCI of 8.27 (from 7.50 in August).

In the South Island the Canterbury/Westland's PCI was 4.93 (edging up from 4.76 in August), Otago's was 3.18 (2.58), and Nelson/Marlborough's was 3.10 (from 2.88). Southland made the biggest gain with a PCI of 2.39, well up from 0.42 in August.

Rents in September were unchanged from a year ago, but there are some small signs that rents are beginning to gain upward momentum in the top half of the North Island.

During September floating mortgage rates eased to a 33-year low of 6.2% while fixed mortgage rates remained steady.