Property experts tip Sydney and Melbourne house prices to continue rising. Source: Supplied

More than half of the property valuers, fund managers, financiers and analysts surveyed for the Australian Property Institute’s 34th Property Direction Survey believed Sydney and Melbourne property markets were either in or entering a bubble.

Just more than half of respondents also believed prices in southern states would continue to rise.

Ian Muir, senior vice president of the Australian Property Institute’s New South Wales division, said three quarters of respondents thought Melbourne prices would rise for the next six to twelve months.

“In other words, residential property in both cities is seen as remaining near the top of the property cycle for some time,’’ Mr Muir said.

The survey predicted Brisbane wouldn’t hit the top of its cycle until 2017.

Respondents said low interest rates had been a significant driver of demand for residential property as well as foreign investment.

“A large majority of respondents see low interest rates as the main driver of demand and prices for Brisbane and Perth residential property, however this view is not as strong as it is for Sydney and Melbourne,’’ Mr Muir said.

Negative gearing was thought to be a more significant driving factor for investment in Brisbane and Perth.

Industry insiders thought changes to foreign ownership laws may affect the property market in the future as well as a slowing Chinese economy, and potential increases in unemployment.