Capital city dwelling prices rose 4.2 per cent over the three months to August, with Melbourne leading the surge with a gain of 6.4 per cent, beating Sydney on 5 per cent, according to property research group RPData.The data highlights the dilemma confronting the Reserve Bank of Australia as its ponders risks linked to racing house prices and a recent rise in the unemployment rate to a 12-year high.High demand for mortgages, especially among property investors, has seen major banks cut lending rates sharply over recent months in order to compete.Tim Lawless, research director at RPData, said seasonal factors might slow the pace of house price growth somewhat in coming months as warmer months return, bringing stock on to the market.