SYDNEY, May 2 (Reuters) - Australian home prices rose sharply in April as demand revived after a run of softer months, a potential red flag for policy makers worried about the risk of a borrowing-fuelled bubble.
Monday's figures from property consultant CoreLogic RP Data showed its index of home prices for the combined capital cities jumped 1.7 percent in April, from March when they had edged up only 0.2 percent.
Annual growth picked up to 7.3 percent, from 6.4 percent in March, breaking a run of slower months.
The upturn is unlikely to be entirely welcomed by the Reserve Bank of Australia (RBA) which signalled alarm last year when a surge in borrowing for investment properties risked over-heating the market.
The central bank holds its May policy meeting on Tuesday amid much speculation it could cut the 2 percent cash rate to offset surprisingly low inflation in the first quarter. The turn in home prices would be one argument against an easing.
Housing prices in Sydney surged 2.4 percent in April, from March, while annual growth popped up yo 8.9 percent. Prices rose 1.1 percent in Melbourne for the month, 2.2 percent in Brisbane and 2 percent in Adelaide. The only falls were in Hobart and Darwin.
RP Data research director Tim Lawless noted that the improvement in the rate of capital gains has been broad-based for the year so far, with every capital city except Perth recording a lift in values.
The median home price across the major cities was A$575,000 ($437,000), with Sydney up at A$780,000 while Melbourne fetched A$585,000.