The booming Sydney and Melbourne property markets are masking much weaker conditions in other capital cities.
Sydney and Melbourne were the only cities to post home price rises of more than one per cent in the June quarter, official figures show.
Home prices rose by almost nine per cent in the harbour city, more than twice the rate of Melbourne's 4.2 per cent gain.
That helped nationwide capital city home prices rise 4.7 per cent in the June quarter, well above market expectations of a 2.4 per cent gain.
Over the year to June, the residential property price index was up 9.8 per cent, the Australian Bureau of Statistics said on Tuesday.
But an almost double digit rise in nationwide prices hides some large disparities in Australia's housing market, Commonwealth Bank senior economist John Peters said.
Perth and Darwin had the weakest outcomes, with a fall in prices in the June quarter and the year to June.
"The combination of record low interest rates, robust investor activity, demand outstripping supply, and strong foreign investment supercharged a huge lift in Sydney house prices," Mr Peters said.
"Residential property growth price growth has been more restrained throughout Australia's other major capital cities - with annual price growth running at very comatose levels."
Conditions in Sydney and Melbourne may soon be impacted by measures by regulators to improve lending standards and reduce the participation of investors in the housing market.
"Anecdotal evidence in recent weeks has hinted that the Sydney and Melbourne property markets have shown some signs of moderating with weekly auction clearance rates coming off the boil," Mr Peters said.
CAPITAL CITY HOME PRICES
* Sydney - up 8.9pct in June qtr, up 18.9pct in the year
* Melbourne - up 4.2pct and 7.8pct
* Brisbane - up 0.9pct and 2.9pct
* Canberra - up 0.8pct and 2.8pct
* Adelaide - up 0.5pct and 2.7pct
* Hobart - steady and up 1.5pct
* Darwin - down 0.8pct and down 1.8pct
* Perth - down 0.9pct and down 1.2pct
Source: Australian Bureau of Statistics
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