Housing prices look set to rise across Australia this year, with home values already surging in the biggest markets of Sydney and Melbourne.
Price growth in the country's two largest cities picked up again in April and May after a slowdown late last year, according to a new report by Moody's Analytics.
Moody's expects nationwide house prices to rise six per cent in 2016 and 4.1 per cent next year.
The forecasts, which use CoreLogic RP Data figures, show Sydney's market is on a renewed uptrend, with home values tipped to jump 7.3 per cent in 2016.
That's still about half of last year's 14.9 per cent rise.
"The Reserve Bank of Australia's May interest rate cut will provide a small fillip to house value growth, as will a further cut in the cash rate that Moody's Analytics expects to occur in the second half of 2016," the report said.
Melbourne's market is nearing a peak and could start to slump because of high supply, the report shows.
House values in that city are forecast to slide more than six per cent from the end of 2016 through to early 2020, but most of the pain will be in apartments.
Thursday's report comes a day after Moody's rang alarm bells about risks in the property market for lenders.
The sudden surge in house prices, combined with high household debt, could expose banks' mortgage portfolios to any downturn in the property market, Moody's said on Wednesday.
And lenders appear to be ramping up appetite for investor lending after a crackdown to comply with regulators last year.
"Nevertheless, strong employment conditions and low interest rates
continue to support the quality of the banks' housing portfolios," Moody's said.
While there are signs of a recovery in Brisbane and Perth house prices, Adelaide and Darwin remain sluggish and are expected to underperform in the next two years.
