House prices jump 3,3% 2nd quarter

House prices have recorded their strongest growth since late 2007.House prices are now back to levels last seen before the onset of the global financial crisis and are expected to continue rising over the rest of 2009 and into 2010, a survey by Australian Property Monitors (APM) found.

The national median house price rose to $484,308 in the June quarter, from $468,694 in the March quarter.

Most of the growth was driven by increased house values in Darwin, Hobart, Melbourne and Sydney, APM said.

APM economist Matthew Bell said the market had been consolidating since the first quarter of 2009 and that had now been transformed into strong growth across the country.

While the market had been supported by low interest rates, flat prices and a boost to the federal government's first home owner grants, the upper end of the sector had been particularly strong in the June quarter.

For Sydney, Melbourne and Brisbane, median housing prices in the top 50 per cent of suburbs grew by nearly double the rate of those of the bottom 50 per cent in the quarter.

"Not surprisingly this has coincided with the stockmarket rebounding by nearly 30 per cent from its March lows and the economic outlook improving," Mr Bell said.

"Rising unemployment remains the biggest risk to house prices, but this risk has lessened over the past quarter with forecasts of peak unemployment falling below eight per cent and the economy expected to avoid a technical recession," he said.

"With population growing strongly and strong housing finance ,all indicators point to house prices will continue to rise in the second half of 2009 and well into 2010."