On Tuesday, the Australian Bureau of Statistics reported that Australian home prices rose by 1.0 per cent in the December quarter, to be up 5.0 per cent for the year.

Growth was down from growth of 8.3 per cent in the year to the end of the September quarter, and 10.2 per cent in the year to June.

"The results are in line with market indicators like falling auction clearance rates, and point to a continued moderation in annual property price growth across a number of Australia's capital cities," said ABS chief economist, Bruce Hockman.

Hockman attributed the weaker growth to tighter regulatory controls and the resulting slowdown in investor credit growth.

"The rebalancing of the Aussie housing market continues," said Craig James, chief economist of CommSec. 

"Home prices rose over the December quarter, but are decelerating in annual growth terms," he said.

Hobart leading property price gains

“There has been a major change in the pattern of house price growth across Australia’s major cities,” said HIA Senior Economist, Shane Garrett.

Growth slowed the most significantly in Sydney, where growth for the year was only 3.8 per cent, down from 9.4 per cent in the year ending September. 

Source: ABS.

“Home prices in Hobart are now the fastest growing of any capital city. Sydney had consistently topped the list in recent years but has since slipped to fourth place in terms of price growth," said Garrett.

“Hobart’s impressive turnaround will give hope to other markets around Australia," he said.

“History shows that house prices eventually grow fastest in the markets which have seen low growth in the recent past," said Garrett, noting that between 2002 and 2012, Sydney home prices grew more slowly than in any other capital city. 

New homes at six-year highs in South Australia

South Australia gained 2,700 new homes in the December quarter, the biggest increase in six years.

Overall, the number of residential dwellings in Australia rose by 40,400 to 10,003,100 in the December quarter 2017.

The number of NSW homes rose by just 7,800 homes during the quarter – the lowest level in 3.5 years.

Value of Aussie homes at a record $6.87 billion

The value of Australian homes is at record highs of $6.87 trillion as at 31 December 2017.

"So the ‘wealth effect’ continues," commented James.

Click here to view the ABS data in full.

RBA minutes show the central bank is closely monitoring property markets

The Reserve Bank issued the minutes from its 6 March 2018 board meeting and noted the following.

"The housing markets in Sydney and Melbourne had slowed in preceding months and conditions in housing markets elsewhere had been relatively stable. Tighter credit standards had been helpful in containing the build-up of risk on household balance sheets. Housing credit growth had eased, particularly for investors. However, household debt levels remained high, which contributed to the uncertainty surrounding the outlook for consumption growth. Members agreed that household balance sheets still warranted careful monitoring."

Read the minutes from the 6 March RBA board meeting in full.

Read more about Australia's property prices:

Property prices on the rise: REIA report

Property prices down across Australia: REIA

Melbourne tops property growth over 20 years with 335% gains: CoreLogic