SYDNEY (REUTERS) - Australian home prices rose overall in September as record-low mortgage rates kept demand strong in Melbourne and Sydney, though the performance of other cities was a lot more patchy.

Figures released on Monday (Oct 3) from property consultant CoreLogic showed its index of home prices for the combined capital cities climbed 1.0 per cent in September, from August, when it rose 1.1 per cent.

Annual growth in prices ticked up to 7.1 per cent in September, from 7 per cent in August, though that remained a long way from last year's peak atop 11 percent.

The second straight month of gains followed rate cuts from the Reserve Bank of Australia (RBA) in May and August, which took bank borrowing costs to an all-time low of 1.5 per cent.

After its last easing, the central bank played down risks of a bubble in the housing market and specifically noted that changes to the methodology of CoreLogic's data had overstated recent price gains.

The central bank holds its October policy meeting on Tuesday and is considered almost certain to keep rates steady as it assesses the impact of past easing.

CoreLogic's September data showed a familiar pattern with continued strength in Sydney and Melbourne but huge variations elsewhere.

Home values were estimated to have jumped 2.3 per cent in Melbourne during September alone, bringing gains for the third quarter to a blistering 5 percent.

Prices in Sydney increased by 0.8 per cent in September, and 3.5 per cent for the quarter.

Canberra and Adelaide both had upbeat quarters, but prices actually fell in Brisbane, Perth and Darwin.