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Property prices rising in Australia and analysts predict positive outlook

Analysts said the increase of 1.1% is due to the government's stimulus package which includes help for first time buyers and a reduction in interest rates.

The national survey of housing prices by RP Data-Rismark shows property values have recovered from falls of 3% in 2008.

In Sydney, property prices were up 0.5% for the three months to February, Melbourne prices rose 1.9% and Darwin prices were up 6.1%. However prices fell in other cities, with Brisbane down 2.2% and Canberra down 1.8%.

RP Data senior research analyst Cameron Kusher said the government's stimulus package, which doubled the first home owner's grant from $7,000 to $14,000 for pre-existing homes, pushed more buyers into the market.

'The first homebuyers grant has been a very successful initiative and you can see that by how many first home buyers are out there getting finance commitments,' he said.

A sharp reduction in interest rates had also pushed the market up, he added. 'People that even five or six months ago probably weren't even able to dream about owning a property are realising that it's a pretty good time to go out there and buy,' he explained.

The most expensive property is in Sydney, with a median price of $559,360 while the least expensive is in Adelaide at a median price of $407,020.

Housing Industry of Australia chief economist Harley Dale said that the outlook for the property market is positive. 'There's some weakness at the higher end of the market that's been widely spoken about for some time now. There's support at the low end and flat lining in the middle,' he said.

Despite the boost to the property market the Reserve Bank has conceded that Australia was already likely to be in recession and the World Bank has lowered its growth forecasts for the country.