The comments come as new Australian Property Monitors figures show Australian housing growth slowed to 2.4% during the June quarter, with annual house price growth at a higher-than-expected 15%.

APM economist Matthew Bell says while that growth rate definitely shows evidence of a slowdown, the property market is performing better than expected and prices are expected to grow by up to 10% by the end of the year.

He says the 6% growth for the first six months of the year indicates the entire 2010 growth should be “much stronger” than previously expected.

“I was quite comfortable in the first quarter, grew more uncomfortable in the second quarter with some of the results, but now I think we’re going to see about 8-10% growth and I’m very happy with that. It’s certainly surprising, and not at all a bad result.”

“I think everyone now is talking about capacity constraints, with demand and so on, which will continue pushing up prices. And look at unemployment, which is doing very well, especially in Canberra.”

The APM data shows Melbourne is still the country’s hottest property market, with annual growth of 27% to a median of $578,447, representing growth of 4.4% for the quarter. However, that quarterly growth is the lowest since March 2009.

Sydney grew by 2.3% over the quarter, and 13% over the year, to reach $625,488, while Canberra recorded 1.9% growth for the quarter, and 16.5% for the year, to $568,520.

Prices actually dropped during the quarter in Hobart and Darwin by 1.9% and 0.7% respectively, to $308,434 and $581.290.

The growth in this quarter was largely due to activity in the more affordable suburbs, Bell says. With price growth moderating, sellers have been struggling to obtain their target prices and bargain-hunters have been out in force, with the lower-end of the market outperforming the top for the first time in 12 months.   (Reprint from SmartCompany.com.au)