During the current boom, property values surpassed their previous peaks in four of the major capital cities.
A new report written by Nick Proud from the Residential Development Council and Tim Lawless from RP Data shows Sydney has made the greatest gains, leapfrogging its previous high by 18.7 per cent.
Values are 6.1 per cent above the previous high point in Melbourne, 3.0 per cent higher in Perth and 2.2 per cent higher in Canberra.
By contrast, the other capital cities have experienced growth but remain below their record prices.
The shortfal in prices now compared to the previous peak is 4.6 per cent in Brisbane, 2.6 per cent in Adelaide, 8.9 per cent in Hobart and 6.0 per cent in Darwin.
However, the report warns Perth, Sydney and Melbourne may have passed their highest rate of activity and price growth is likely to moderate in these cities.
“We have already seen a slowdown in the rate of value growth across Perth and it seems peak growth has now probably passed in both Sydney and Melbourne as well,” it stated.
The authors suggest investors may turn to more affordable markets that are still on the upswing.
“It will be interesting to see whether investors start to turn their attention away from these cities and towards higher yielding markets that are much earlier in their value growth phase, such as Brisbane and Adelaide where value growth is now becoming more evident,” the report stated.
The authors identify positive indicators that growth is likely to continue through to 2015, including low interest rates, steady population increases, climbing household wealth and a surge in the housing construction sector.
However, they also points to subdued wage growth, rising unemployment, falling first home buyer rates and low affordability as factors that may jeopardise growth.