According to official figures released today, prices jumped almost 14 per cent in the year to March, but that growth slowed in the March quarter as high interest rates started to bite.
The Australian Bureau of Statistics house price index - which calculates the average for the country's eight capitals - rose 13.8 per cent in the year to March, but just 1.1 per cent in the March quarter. The slight quarterly increase was still above economists' expectations of a 0.1 rise.
Melbourne led the nation with strong growth of 4.1 per cent, with Brisbane up 2.8 per cent, Adelaide up 2.1 per cent and Canberra up 1.0 per cent.
However Sydney prices fell 1.5 per cent in the March quarter, Perth slipped 0.6 per cent, Hobart was down 0.7 per cent and Darwin fell 1.3 per cent.
The Reserve Bank of Australia meets tomorrow to decide its next interest rate movement. The official cash rate currently sits at 7.25 per cent, and most economists expect the central bank will hold rates steady.
The Reserve Bank of Australia (RBA) is widely expected to leave interest rates unchanged after tomorrow's monthly board meeting, which will provide some relief to homebuyers.
But a new inflation survey - also released today - suggests another rate rise cannot be ruled out in coming months while a separate report showed a modest recovery in business hiring intentions.
The RBA has raised the official cash rate four times since August while retail banks topped-up the increases with several independent hikes.
