Australian house prices are expected to gain further next year as population growth outstrips the supply of new homes, Australian Property Monitors said.

The median home price in capital cities was A$501,000 as of 30 Sept, 3% above the December 2007 level, the group said in an e-mailed news release. Melbourne residential property prices saw the strongest growth, rising 12.5% since March, with auction clearance rates at over 80%. Sydney median home prices gained 6.1%.

Population is growing at record rates and increased financing and building approvals for new housing have not yet flowed through to housing starts, keeping pressure on home prices, APM Economist Matthew Bell said.

bloomberg.com