Despite the rise in prices during March, the three month-growth rate has now slowed to just 1.7% with an annualised rate of 6.8%, compared to the average of 14.3% recorded over the second half of last year.
The Residex figures show Melbourne prices gained 2.8% during March, pushing the annualised growth rate to 17.7%, while in Sydney prices grew by 1.1% for the month and 13.5% for the year.
In Perth, prices grew by 1.2% following a 1.2% decline, while in Brisbane prices fell by 1.7% during the month, but were up by 2.2% over the quarter.
Unit prices also recorded a 1.9% gain in March across the country, and have recorded a steady growth rate during the first quarter of the year at 3%.
Sydney remains the most expensive city, according to the data, with a median house price of $641,000 and unit price of $449,000. Melbourne isn't far behind with prices of $562,500 and $432,500 respectively, while Canberra comes in third place with $507,000 and $404,500.
Darwin recorded a median housing price of $503,000, along with a unit price of $412,000, while in Perth housing prices were at $486,500 with a median unit price of $399,500.
In Brisbane, housing remained at $461,000 with units at $367,500, while Adelaide recorded a housing price of $402,000 and unit price of $309,000. Hobart prices were at $369,000, with a unit price of $283,000 – one of the lowest rates in the country.
Westpac economics senior economist Matthew Hassan said in response that a slowdown in prices will occur.
"What is less clear is how sustained this moderation will be. Our preferred measures are giving a somewhat mixed message with figures for January-February from RP Data-Residex suggesting any slowdown has been brief, shallow and may already be over (their house price measure posted a solid 3.6% gain in January-February)."
"However, with approvals down 20% in four months, the housing finance data suggests a much more pronounced slowing in demand is coming through."
Property analysts have pegged demand to slow this year as interest rates continue to rise and first home owners back out of the market due to a withdrawal of stimulus. Additionally, reports suggest banks are set to cut their LVR ratios to curb their exposure to the overblown residential property market.
Hassan added recent auction results suggest the moderation may not last long. In several markets, particularly Melbourne, prices have remained high as upgraders and investors continue to look for deals before interest rates rise.
"Recent auction results also suggest any cooling off in housing markets has been marginal - at least for those parts of the market that see properties sold via auction (15-20% of the Sydney and Melbourne markets but much less in other capital cities)."
"Our estimates suggest seasonally adjusted clearance rates are holding at around 72-74% in both Sydney and Melbourne, well above long run averages of 56% and 66% respectively and with only a moderate cooling evident in Melbourne (from near record high clearance rates late last year)."
