All but one of Australia's state capitals have shown an increase in median property prices over the past year, according to the latest figures from the Real Estate Institute of Australia (REIA).

Adelaide was the star performer, showing a 19.1% increase in median house prices and a 20.7% increase in 'other dwelling' prices over the last 12 months, according to the REIA's quarterly statistics for March 2008.

Melbourne and Hobart also put in excellent performances, registering annual increases of 13.7% and 13.9% respectively for houses, and 14.9% and 12.1% respectively for other dwellings.

Quarterly figures tell a different story, with every state capital except for Darwin showing negative growth in at least one of the two dwelling categories. Melbourne was the worst hit, registering quarterly growth for houses and other dwellings of -8.4% and -3.9% respectively.

"The impact of interest rate rises and inflation is clearly being felt in the housing market as median house prices are beginning to go into negative territory for the first time in some years," said REIA president Noel Dyett.

After registering a record-breaking median house price of $474,000 in December, Perth's median house value has since dropped by $14,000, but Real Estate Institute of Western Australia (REIWA) president Bob Druitt pointed out that this represents a real opportunity for buyers.

Druitt said he believes that Perth's house price correction was an inevitable consolidation after its recent property boom and highlighted that, while there are plenty of properties currently on the market, strong population growth means that Perth won't be a buyer's market for long.

"There are almost 18,000 properties on the market and, while prices have come down, the outlook for interest rates and inflation remains uncertain. Even so, there are many potential buyers who are waiting and watching for the right time to buy and now thinking about making their move," said Druitt.

Couple this with stamp duty cuts that are set to take effect in July, and activity in the Perth property market looks primed to take off once again.

"We'll likely see new buyer activity pick up through late winter and into spring, with well-priced homes being highly sought after," said Druitt.