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Main cities drive Australia's prices

Prices in Australia's key cities have increased significantly over the past year as the market remains buoyant.

Prices in Australia's key cities have increased significantly over the past year as the market remains buoyant.

Analysis from Fitch Ratings shows national house prices have risen by 9.8 per cent in the 12 months to December 2013, with Sydney, Perth and Melbourne driving up demand.

Sydney experienced price growth of 14.5 per cent, while Perth prices were up 9.9 per cent and Melbourne saw rises of 8.5 per cent.

The data shows that both domestic and overseas investment has helped to increase prices, alongside a fall in housing supply and more favourable borrowing conditions.

However, the study did see a fall in first-time buyers because of rising prices, the reduction of first home grants and stamp duty concessions meaning affordability is falling for those hoping to step on to the property ladder.

The latest RP Data figures show that the average house value in Melbourne has now reached $610,000, with strong growth at the top-end of the market.

Posted by Ravin Chatlani.

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