The first month of spring has produced encouraging results for Sydney and Melbourne's property markets as prices continue to recover in the country's biggest cities.
September saw a value increase of 1.7% in both capitals, according to the latest CoreLogic figures, fuelling the largest monthly gain in two-and-a-half years across the combined national market of 0.9%.
Canberra also posted a monthly gain, while values were flat in Adelaide and Brisbane and fell in Darwin, Perth and Hobart.
CoreLogic head of research, Tim Lawless, said that despite the broad upward trend in property prices in FY20 so far, "the national index remains 6.8% below the October 2017 peak, indicating that buyers still have some time to take advantage of improved housing affordability before values return to record highs".
Lawless credited Sydney and Melbourne's strong performance to historically low interest rates and improved access to credit, though he also argued New South Wales and Victoria were benefiting from certain economic and demographic conditions not necessarily found in other states, such as higher population growth and property investor activity, as well as lower unemployment.
Investors comprised 32% of mortgage demand across NSW and 26% in Victoria according to July ABS figures, higher than any other state or territory.
CommBank Senior Economist Gareth Aird described the variations in the national market as a "two-speed track", pointing out that "the home buyer response to rate cuts, the re-election of the Coalition Government and extra borrowing capacity from the APRA-induced changes to loan serviceability assessment has not been uniform across the country".
At just over $900,000, Sydney's median house price is almost twice that of Perth's, the most affordable capital for houses.
While Aird argued "there is a lot of momentum in the market at the moment, [and] all of the forward-looking indicators are pointing to further price rises", Lawless warned that, "with household debt levels [reaching] new record highs relative to their incomes over the June quarter... the sector is vulnerable to a shock or change in household circumstances”.