SYDNEY, Sept 1 Australian home prices rose solidly in August for a third straight month bringing total gains for the winter quarter to the highest since 2007.
Figures from property consultant RPData-Rismark showed dwelling prices in Australia's major cities rose 1.1 percent in August, from July when they climbed 1.6 percent.
Prices were up 10.9 percent on August last year, accelerating from a 10.2 percent annual pace in July.
For the three months to August, which marks winter for Australia, prices rose a brisk 4.2 percent led by gains of 5 percent in Sydney and 6.4 percent in Melbourne.
Annual price growth quickened to 16.2 percent in Sydney and 11.7 percent in Melbourne.
The median price of a home in Sydney was A$650,000 ($605,800), compared to A$523,750 in Melbourne and A$520,000 across all the major cities.
"With today marking the first day of Spring, we are expecting listings numbers to rise over the coming month which will provide a real test for the housing market," said RP Data research director Tim Lawless.
"Considering the ongoing high rate of auction clearance rates, a generally rapid rate of sale and the ongoing low interest rate environment, it's likely that dwelling values rise even further over the next three months."
Rising home prices have been mostly welcomed by policymakers as necessary to encourage a much-needed revival in home building, though the Reserve Bank of Australia (RBA) has warned speculators not to get carried away.
The central bank holds its September policy meeting on Tuesday and is widely expected to again hold rates at a record low of 2.5 percent, and to signal further stability for policy.
Falling funding costs have led Australia's major banks to cut a range of fixed mortgage rates in recent weeks giving a further fillip to the housing market. (Reporting by Wayne Cole; Editing by Shri Navaratnam)