Australia's house prices have seen the steepest increase in almost 18 years — with Sydney and Canberra recording the fastest quarterly increases in nearly three decades.
Melbourne's house and unit prices have reached a new record high, with the median house price likely to pass $1m in the next quarter.
The Domain House Price report for the March quarter reveals property affordability is being pushed further out of reach for many desperate to get into the market, especially for houses.
Released this morning, the report also reveals capital cities have outperformed regional areas for the first time in over a year
In more grim news for buyers, traditionally affordable cities like Adelaide and Hobart are also setting price records.
Domain Senior Research Analyst Dr Nicola Powell said the average house price in Australia is now just under $900,000 with units at just under $585,000.
"Nationally, house prices reached a record high over the March quarter of $899,509," she said.
"The 5.7 per cent quarterly gain is the steepest rise in almost 18 years, with all capital cities posting growth.
"This is the first time house prices have risen simultaneously for two consecutive quarters since 2009 post-GFC."
"Record low interest rates, improved household savings, low listing volumes, post-lockdown lifestyle changes, consumer sentiment roaring to an 11-year high, returning cashed-up expats and government incentives have fuelled demand for housing and a strong market performance."
Sydney house prices soared to a new record median of $1,309,195 after jumping $103,000 over the March quarter, or 8.5 per cent.
"This is the fastest quarterly acceleration of house prices since Domain records began in 1993," Dr Powell said.
"This has pushed annual house price gains into double digit percentage growth, making it the steepest increase since the lead up to the previous price peak in mid-2017, at 12.6 per cent."
Houses at the top of the market are leading the charge, with the strongest quarterly gains recorded in the eastern suburbs, northern beaches, Baulkham Hills and Hawkesbury.
But all Sydney regions have hit record high prices.
"Over the past three decades, Sydney house prices have twice increased by more than eight per cent over a quarter, the first time in June 2015," Dr Powell said.
"This outcome highlights the rarity of such a significant quarterly gain, presenting unique conditions for buyers and sellers.
"For homeowners, this is the fastest rate of capital growth on record."
Units are continuing to underperform compared with houses.
Unit prices increased 2.2 per cent over the March quarter to $751,038, a marginal 0.2 per cent higher than the same time last year.
Dr Powell said the rapid quarterly growth isn't likely to continue.
"Prices will still grow but it is unlikely to stay at such sustained growth rates over each quarter," Dr Powell said.
* Source - 9 news - Sarah Swain