HOUSE prices rose 2.8 per cent in the first four months of this year wiping out last year's price falls, new figures show.

Prices rose in all Australian capital cities apart from Perth in the first four months of this year, according to the RP Data/Rismark Australian Home Value Index.

The median Melbourne home price rose 4.5 per cent to $436,548.

The median house price rose 4.4 per cent. The median price of units rose 4.5 per cent.

"Home values are rising in around 80 per cent of all suburbs, with only the top 20 per cent of suburbs ranked by price suffering material falls," Rismark International's managing director Christopher Joy said.

However Melbourne property investors received the worst gross rental yield in the country at 4.2 per cent for houses and 4.8 per cent for units.

The news was better for vendors. Melbourne houses took the least amount of time to sell - an average of 32 days.

RP Data's Tim Lawless said the rising prices had sparked concerns a price bubble was developing in the first home buyer market.

But he said these claims were unjustified.

"Home values in Australia's mortgage belts, which are the prime first home buyer markets, were flat or falling between 2004-07 while the inner city and affluent markets enjoyed consistent growth," he said.

"In 2008-09 we have seen a reversal of these fortunes."

The figures show rents have begun to stabilise after three years of rises.

"We are now seeing growth rates for weekly rents start to level due to decreasing rental affordability which is causing many renters to consider buying a home instead of renting," Mr Lawless said.

"Gross rental yields are likely to peak over the coming months suggesting that now is probably the best time for investors to roll up their sleeves and become active."

Mr Joy said Melbourne home values rose 1.5 per cent in the 12 months to April 2009. Over this period, the median house price rose 1 per cent while the unit price rose by 3 per cent.

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