Confidence in the Auckland housing market appears to be slowly returning with more buyers and sellers entering the market.

Barfoot & Thompson sold 559 homes in February, an 8.9 percent increase in sales on January. The average price was $512,535, a 3.5 percent rise on the price being achieved in February last year. It is the first time in four years that February sales have been higher than in the proceeding January.

Sellers also re-entered the market, with Barfoot & Thompson listing 1470 new homes, up 50.8 percent on those listed in January. While down 28.3 percent on those listed for sale in the same month last year, February 2008's listings were the highest in any month for more than two years.

Managing Director Peter Thompson says buyers and sellers are cautiously re-entering the market and there is cause to have some optimism that the housing market is settling.

“While sales volumes remain modest to those achieved in the past decade, the encouraging news from a home owner's perspective is that values are holding, and in February at least have edged up."

He says lower interest rates, awareness of the low number of residential building permits being granted and the general growth of the Auckland region are all contributing factors to the modest turn around.

More than half of all the homes sold in February (53.7 percent) sold above $500,000, while 63 homes sold above $750,000 (46 in January) and 30 homes sold above $1million (15).

Rental demand remained strong, with 786 houses and units let during February, only five rentals lower than in January, which is traditionally the most active month and 10.1 percent higher than in February last year.

The company says average rentals at $380 a week are consistent with the rents being achieved in January, and in February last year.