Sydney home prices up 16pc over 12 months, Melbourne up 11.8pc

CoreLogic's home value index showed Australian house prices continued to rise into 2017, with the cost of capital city homes rising 0.7 per cent in the last month alone.

Haymarket NSW apartment tower construction on the previous Sydney Entertainment centre and carpark site Source: Flickr nIcephotog

Capital city prices were up 2.3 per cent over the past quarter and 10.7 per cent over the last 12 months, on a national basis.

While many economists expect home prices to stagnate or fall over the next few years, the Commonwealth Bank's economics team is predicting only a modest slowdown from this year's growth.