Price growth hits four-year record

National house prices surged to a record median price of $597,556, a 9.8 per cent increase over the last 12 months.

APM senior economist Andrew Wilson said the market had been boosted by Australia’s economic recovery.

“All capital city median house prices are now at or close to new records thanks to 2013’s combination of low interest rates, reasonable economic performance and rising confidence,” Dr Wilson said.

However, he expected the strong growth to slow as the year went on, except in Brisbane and Perth.

“Last year’s buyer momentum will ensure a positive start to 2014, but prices growth is set to moderate over the year as economic activity wanes,” he said.

“Brisbane and Perth, however, are likely to be exceptions driven by strengthening local economies.”

Sydney was a standout performer, achieving a 15.1 per cent rise in median price over the last 12 months for a new median of $763,169.

However, Dr Wilson said this period of growth was unlikely to last.

“The current level of price growth in Sydney is unsustainable - particularly given the likely continued deterioration of the local economy and the prospect of a flood of new rental properties overshooting underlying market fundamentals,” he said.

Melbourne had the second highest growth rate, recording an increase of 8.6 per cent over the year.

The median price for Victoria's capital is now sitting at $568,834.