House prices across Australia rose in June after a sluggish May, with Melbourne prices growing at a faster rate than Sydney's, according to a new report from property valuation provider Propell.
Melbourne house prices lifted 3 per cent in the month compared to Sydney's 2.4 per cent, Propell said in its July 2015 Australian residential market report.
With Sydney's property growth moderating, Melbourne's market could match or even overtake Sydney in the coming year, Propell said.
The median house price in Sydney has now reached $900 000, and will probably hit the $1 million mark in the next 12 months.
All capital cities except Perth and Darwin recorded house price growth in June, while apartment prices were sluggish across the board.
Propell predicts only Sydney’s apartment market will record significant growth over the next year.
Due to tougher loan rules investor demand was down in June, with property investors accounting for 30 per cent of all loans in June, down from 44 per cent.
Propell expects foreign buyers will not be deterred by new regulations on FIRB compliance.
For foreign investors buying in US dollars, Sydney’s prices are unchanged on last year and remain an attractive investment, while the rest of the country has actually gotten cheaper in US dollar terms.