Property prices have continued to climb according to the Domain Group House Price Report, with the national median house price up by 1.8 per cent over the March quarter to be at 8 per cent for the year.
Nationally the median price stands at $666,242.
"Although the reduction in mortgage rates improved affordability only marginally, buyer and seller confidence has lifted based on the prospect of further cuts fuelling house price growth," Domain Group Senior Economist Dr Andrew Wilson said in the report.
Both house and apartment prices rose to record levels in Sydney.
The median price for a house in Sydney stands at $914,056, a rise of 3.6 per cent over the quarter, and 16 per cent over the year.
Prices fell in Perth though, by 2.1 per cent in the quarter, to be 2.8 per cent weaker for the year. The median price there is now $599,574. Brisbane and Hobart also fell in the quarter.
Apartment prices also hit a record in Sydney, with the median price at $609,800, a 9 per cent increase over the year.
"Although the reduction in mortgage rates improved affordability only marginally, buyer and seller confidence has lifted based on the prospect of further cuts fuelling house price growth," Andrew Wilson said.
The Reserve Bank of Australia meets next Tuesday (May 5) to discuss the possibility of another interest rate cut, although recent positive economic data like retail sales and unemployment have reduced the chances of a reduction, despite a higher Australian dollar.
"Capital city prices growth are likely to track local economic performance with the prospect of lower interest rates now diminishing as early signs continue to emerge of an improvement in national economic activity," Mr Wilson said.
He believes the east coast of Australia will continue to see price growth.
"Sydney will continue to lead the pack in house price growth, clearly ahead of Melbourne, Adelaide, Canberra, Brisbane and Hobart, which are set to continue to record modest to moderate prices growth off the back of improving economies. Flattening economic activity and falling confidence in Perth, and to a lesser degree Darwin, will continue to put downward pressure on house price growth as those capital cities transition rapidly from their previous resource and population boom environments."
