Melbourne house prices grow to new record

Over the September quarter, in seasonally adjusted terms, Melbourne's median house price has increased by nearly 9%, according to the Real Estate Institute of Victoria (REIV).

Melbourne's house price median is now $595,500 from a revised $547,500 in the June quarter, pushing it to a new peak.

Previous high price recording included $559,000 in December quarter 2010.

REIV CEO Enzo Raimondo warned that this price growth is unlikely to be able to be sustained over the long-term.

“Interest rates remain low and buyers are taking advantage of this with the chances of a further rate cut this year becoming less and less likely," said Raimondo.

"But judging from the rather rapid increase in house prices, affordability pressures could start to act as a counter balance to demand in the next few months, particularly for first home buyers," he said.

A very strong increase in demand was behind the increase, particularly in August and September.

However, strongest growth in median prices were concentrated around the inner and middle suburbs, which may be skewed due to presitge property transactions.

Raimondo pointed to surges in Balwyn, Brighton East, Ascot Vale, Balwyn North, and Footscray.

"This is reflective of the relatively high number of premium sales, particularly million dollar sales, in this quarter," he said.

In regional Victoria, there was a 0.8% increase overall, however Geelong, Ballarat and Bendigo tended to outperform.