Capital city house prices finished the financial year with double-digit gains, but the rate of growth is easing.  

Capital city home values rose 10.1 per cent in the 12 months to the end of June, the RP Data Rismark Home Value Index showed on Tuesday.

For the month, prices rose 1.4 per cent after falling 1.9 per cent in May.

The largest gains for the financial year were in Sydney and Melbourne, up 15.4 per cent and 9.4 per cent, respectively.

Hobart had the weakest gains, just 2.5 per cent.

RP Data research director Tim Lawless said looking back at the year, house prices peaked last August when they rose four per cent.

“Since that time the rate of capital gain has generally trended towards a more sustainable level,” he said.

“The slowdown in dwelling value appreciation will be a welcome relief to policy makers and those seeking to buy into the housing market.”

Mr Lawless expects house prices to be well supported because interest rates likely to remain at record low levels.

“The recent volatility in the month-to-month index reading is likely to be a seasonal factor,” he said.

“The last time we saw a negative quarterly movement in our combined capital city index was May last year.”

Sydney once again was the most expensive city with a median dwelling price of $690,000 in May, twice that of Hobart’s $328,250.