Perth's house prices up another 4.5%

But REIWA president Rob Druitt said while prices had continued to increase, the rate of growth had slowed.

"The growth rate of 4.5 per cent, while still very robust, is down from the rate of 8.6 per cent in the (previous) September quarter," Mr Druitt said.

Population growth and the strong resources boom-fuelled economy was continuing to put upward pressure on prices, Mr Druitt said.

"REIWA anticipates further modest growth throughout 2007, which will see affordability become even more of an issue for many people trying to enter the market."

First home buyer loans dropped 16 per cent in the three months to November, on the back of the 10 per cent fall in the previous period, Mr Druitt said.

"Clearly the absence of first home buyers underpinning the market is having a flow-on effect reflected in the increased stock of listings and fall in sales volume," he said.

The REIWA figures are the first official median house price figures released for the December quarter.

Perth is expected to remain Australia's second most expensive city for housing, after Sydney.

Sydney's median house price in the September quarter was about $520,000, according to the Real Estate Institute of Australia.

Three years ago, Perth house prices were less than half of those in Sydney.