House prices in Melbourne increased for a seventh consecutive quarter at the end of 2017, but the rate of growth has slowed significantly.

The median house price in the metropolitan area finished the year at $821,000, increasing by 1.1 per cent in the final three months of the year.

While growth in that quarter was soft, the annual rate for 2017 was 13.2 per cent, the fastest since 2010.

The Real Estate Institute of Victoria released the figures today and despite the slowdown, president Richard Simpson described 2017 as Melbourne's strongest performance in seven years.

"The last quarter did slow up in terms of growth, up 1.1 per cent for the median house price [compared with] the September quarter, but that was to be expected," he said.

"It's a very busy time, that September quarter, with spring-time selling, and that would account for the [lower growth in the December quarter].

"But overall, it was a great increase across the year."

Mr Simpson said the last quarter slowdown was also caused by increased supply and reduced investor activity.

Is the boom over?

Analysts have debated whether the boom is over for Australia's housing market, which is worth $6.8 trillion.

While experts say the story will be different across the different states and cities, many point to a slowdown in Sydney and Melbourne.

Melbourne's last quarter's growth for the median house price was well below the increase of 7.6 per cent seen in the first three months of 2017.

Mr Simpson rejected suggestions the boom was over in Melbourne.

"I think there is still going to be good house price growth in Melbourne," he said.

"We've got Melbourne growing at 146,000 people per year and that's obviously going to put pressure on house prices.

"But I think what we are going to see is a much lower rate of growth across the year of 2018 in relation to median house prices.

"I think we are going to see not that 13 per cent [growth] that we saw last year, but more like 5 to 8 per cent growth."

He cited interstate and overseas migration, government initiatives for first homebuyers and low interest rates as the main drivers of a price growth in 2017.

Suburbs in expensive areas experienced the fasted growth in median house prices, including Toorak, South Yarra, Surrey Hills and Canterbury.

In outer suburbs, the median house price increased 2.4 per cent for the quarter, reaching $666,500.

Median apartment prices increased 1.2 per cent for the quarter, to $594,500.

Prices grew strongly in regional Victoria, with the median house price up 2.6 per cent for the quarter and 10 per cent for the year, to reach $396,500.

Top growth suburbs - December Quarter 2017

Suburb Sep 2017 median Dec 2017 median Quarterly change 1 Toorak $3.21 million $4.6 million 43.3 per cent 2 South Yarra $1.79 million $2.28 million 26.7 per cent 3 Mentone $1 million $1.2 million 19.7 per cent 4 Surrey Hills $1.93 million $2.28 million 18.4 per cent 5 Essendon $1.45 million $1.71 million 18.3 per cent 6 Hawthorn $2.3 million $2.72 million 18.2 per cent 7 Malvern $2.01 million $2.37 million 17.7 per cent 8 Keysborough $760,500 $885,000 16.4 per cent 9 Canterbury $2.87 million $3.3 million 14.8 per cent 10 Rosebud $552,000 $624,000 13.0 per cent

Source: Real Estate Institute of Victoria

Melbourne's most affordable suburbs

Suburb Dec 2017 median 1 Kurunjang $387,000 2 Melton South $420,500 3 Melton West $439,500 4 Wyndham Vale $500,000 5 Werribee $511,250 6 Sunbury $520,000 7 Pakenham $520,000 8 Cranbourne West $526,500 9 Tarneit $542,500 10 Cranbourne $550,000

Source: Real Estate Institute of Victoria

Melbourne's most expensive suburbs

Suburb Dec 2017 median 1 Toorak $4.6 million 2 Canterbury $3.3 million 3 Hawthorn $2.72 million 4 Brighton $2.7 million 5 Balwyn $2.45 million 6 Caulfield North $2.51 million 7 Malvern $2.37 million 8 Camberwell $2.3 million 9 Surrey Hills $2.29 million 10 South Yarra $2.28 million

Source: Real Estate Institute of Victoria