R>Australian house prices are growing more steadily and are set to increase by as much as 3% this year and between 4% and 7% next year, according to experts.

The latest TP Data-Rismark home value index which covers eight key cities shows that in September prices increased by 1.4% from the previous month, the biggest increase for 30 months.

It also shows that on a quarterly basis prices have increased by 2% in the third quarter of the year. Tim Lawless, research director says the steady improvement in prices is down to interest rate cuts.