Australian Property Monitors (APM) said house prices in Adelaide climbed 3% over the quarter amidst the continuing strength of the resources sector. Strong demand for houses in Darwin had boosted prices up by 5% in the same period. Despite seeing record house prices, Melbourne and Brisbane property markets experienced slow growth over the December quarter, the data showed. Sydney saw negligible gains in the same period. Perth houses edged over the $500,000 mark for the first time, however, the city suffered its lowest quarterly growth in five years at just 1%. Demand for units remained weak, with all eastern capitals registering small declines in unit prices. Hobart was the only bright spot, notching a 6% rise over the quarter. "The headline figures for all eastern capitals indicate that those markets are in stabilisation phase of their property cycles," said Michael McNamara, operations manager for APM. However, APM noted that despite the overall sluggish performance, premium properties in the eastern states are racking up solid gains at the expense of mortgage belt and outer suburban areas. For example, properties in Sydney's affluent eastern suburbs and lower north shore suburbs such as Palm Beach, Waverton and Bellevue Hill achieved a double digit growth in the December quarter while mortgage belts outer suburbs such as Macquarie Fields and Lakemba languished. A similar pattern was noted in Melbourne, according to the report. "Strong migration patterns, wage growth and a weak new housing industry will all intensify the divide between premium and more outer suburban markets in 2007," McNamara added.

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