House prices have grown by almost one-fifth over the past year, according to a report released by the Real Estate Institute of Australia (REIA).
"This quarter has seen the Australian weighted average median house price increase by 0.8 per cent to $518,624", REIA President David Airey announced this week.
"This is compared to an increase of 18.7 per cent over the year", Mr Airey said, remarking that it is the highest annual increase since September 2003.
Median house prices recorded increases in most Australian capital cities property markets over the March quarter, with the exception of Melbourne and Canberra.
Sydney, Darwin and Melbourne have the highest median house prices while the lowest are in Hobart, Adelaide and Brisbane.
However, the REIA Mortgage Choice Real Estate Market Facts publication has shown a slowdown in the growth of median house prices for the first quarter of 2010.
"In the first quarter of 2010, the number of loans to first home buyers decreased dramatically, as did the total number of housing loans", Mr Airey said.
According to Kristy Sheppard, Senior Corporate Affairs Manager, Mortgage Choice, the first quarter of 2010 brought with it near-record auction clearance rates but a decline in housing finance demand, which indicated that more experienced buyers with equity at their disposal were re-entering the market as first home buyer activity slowed significantly.
Adelaide house prices reported the highest increase during the quarter while Hobart set the record for the year. The median house price in Adelaide increased 4.5 per cent compared to the previous quarter while the median price for Hobart increased 20.8 per cent over the year.
"We need to keep in mind that the March quarter 2010 has not shown the impact of all the recent interest rate increases, we will have to wait until the June quarter to see the full effect this has had on the property market", concluded Mr Airey.