Australian property prices saw the strongest rise in almost three years, according to new figures.

The latest Housing Industry Association report shows that prices jumped by 1.6 per Cent in the December quarter of 2012, the strongest quarterly growth in several years, explained HIA Economist Geordian Murray.

"Nevertheless," he continued, "this result still leaves the price level around 3 per cent below the peak achieved in mid-2010. The index indicates home prices increased by 2.1 per cent over the full 2012 calendar year."

Across capital cities, in the December 2012 quarter the established house price index increased by 2.3 per cent in Sydney, 0.7 per cent in Melbourne, 0.7 per cent in Brisbane, 0.8 per cent in Adelaide, 2.9 per cent in Perth, 2.6 per cent in Darwin and 2.1 per cent in Canberra. The index fell by 1.4 per cent in Hobart.

The new house price index increased by 1.4 per cent in Sydney, 1.5 per cent in Brisbane, 0.7 per cent in Adelaide, 0.5 per cent in Perth, 0.5 per cent in Darwin, and 0.2 per cent in Canberra. Prices fell in Melbourne (-2.1 per cent), while prices were unchanged in Hobart over the December quarter.

"The results may indicate that home buyer demand improved in the last quarter of 2012. Interest rate cuts in late 2011 and throughout 2012 are an obvious contributor to this, but it could also be an early sign that after a few years of bolstering household balance sheets some would-be home buyers may now feel more comfortable," commented Geordan Murray.

"The two cities where new home supply is least responsive to demographic demand, Sydney and Perth, were the two markets that drove home prices during 2012. Supply of new homes in these two cities has been unable to keep pace with demographic demand and we are once again seeing this imbalance manifest in price pressures."

Looking for a new life Down Under?

Browse our listings of houses in Australia:

http://australia.themovechannel.com/property/all