SYDNEY (Reuters) - Home prices in Australia's major cities rose for a third straight month in August while the pace of appreciation moderated, a sign lower mortgage rates are boosting the market without making things too frothy.
Figures out on Monday from property consultant RP Data-Rismark showed dwelling prices rose 0.5 percent in August, from July when they jumped by 1.6 percent. Prices were up 5.3 percent on August last year with a median value of A$490,000 ($438,000).
RP Data's director of research, Tim Lawless, said the more modest rise in prices in August should help counter any concerns about a bubble forming in home prices.
He noted that the average annual capital gain over the past decade has been just 4.3 percent across Australia's combined capital cities.
The Reserve Bank of Australia (RBA) has been counting on low rates to help revive the housing market, and particularly home building, and so support the economy as a long boom in mining cools. The central bank cut rates to a record low of 2.5 percent last month.
The biggest price increase for August of 1.5 percent came in Brisbane, a turnaround for a city which has lagged since the global financial crisis.
"The strong result for August was evident across both the detached housing and the unit markets and may potentially mark a positive turning point for Brisbane's housing market," said Lawless.
Home prices in Sydney firmed 0.6 percent in August, while Melbourne saw a rise of 0.2 percent and Perth recorded a dip of 0.2 percent. For the year to August, Perth still boasted the fastest growth of 9.4 percent, followed by Sydney at 7.0 percent.
Lawless also noted that a lack of supply was supporting prices, with around 15 percent fewer homes listed for sale than the same time last year.
Sydney was again the most expensive Australian city with a median home price of A$587,000, followed by Melbourne at A$507,000 and Canberra at A$503,500.
(Reporting by Wayne Cole; Editing by Shri Navaratnam)