The latest housing index shows Sydney has seen the most dramatic increase, RP Data research director Tim Lawless said.
“Sydney dwelling values are now 15.8 per cent higher than their previous peak, substantially more than Melbourne, where dwelling values are 4.7 percent higher than their previous peak,” he said.
“Perth and Canberra values have risen to be 2.9 and 1.2 per cent higher than their previous high points respectively.”
According to Mr Lawless, the current cycle started in June 2012 but most expansion has happened in the last nine months.
“Dwelling values increased by just 2.9 per cent over the first 12 months of the cycle. However, since last June, values are up by close to 13 per cent,” he said.
However, he warned current levels of acceleration are not likely to last.
“Over the long term, I don’t believe such a strong pace of growth can be sustained - we expect housing market conditions to cool down as the year progresses,” he said.
“If the pace of capital gains doesn’t slow, we may see higher interest rates realised much earlier than previously expected.”
In the March quarter, the combined capital cities recorded a growth rate of 3.5 per cent.
Melbourne saw the biggest gains in the period, with growth of 5.4 per cent.
Close behind were Hobart, recording rates of 4.7 per cent, and Sydney, where rates hit 4.4 per cent.
Only Perth saw growth rates drop over the quarter, albeit by a small margin of 0.6 per cent.
Given growth was positive in Perth in the month of March, this market may be due to lift once again.
Rismark managing director Ben Skilbeck said current trends were consistent with historical patterns.
“March and September have a history of being comparatively strong seasonal months for dwelling value changes,” he said.
“As such, there should be little surprise that, in the presence of high auction clearance rates and in the absence of any major economic changes, the March month delivered materially stronger performance than the flat February result.”