Dwelling values continued to trend upwards in January, according to the latest figures released by RP Data.
The RP Data-Rismark Home Value Index shows a rise of 1.2 per cent in capital city dwelling values over the month of January.
Capital city values have increased by 13.2 per cent since the beginning of the current growth cycle in June 2012 and are now 4.8 per cent higher than their previous peak in October 2010.
RP Data research director Tim Lawless said that capital city housing markets continue to be a mixed bag.
"Sydney and Melbourne were the clear drivers for capital gains over the past year, with values up 13.4 per cent and 11.9 per cent respectively over the twelve months ending January 2014”, Mr Lawless said.
“Excluding Perth, every other capital city has recorded growth of less than five per cent over the past year."
Rismark CEO Ben Skilbeck added that strong population growth, an increasing appetite for housing credit and positive consumer sentiment means prices are unlikely to decline in the near term.
“Most noticeable is investor borrowing which for the calendar year 2013 grew by 7 per cent compared to 3 per cent in 2011”, Mr Skilbeck said.
“While we are yet to observe a significant increase in owner occupier borrowing, lending commitments to this segment for the month of November, the latest available, are 19 per cent higher than the same time last year", he added.
The premium sector of the housing market has gathered pace over the past six months and is now showing the highest capital gains compared with other segments of the housing market.
Dwelling values across the most expensive quarter of the capital city markets were up 6.7 per cent over the past six months (compared with 5.8 per cent growth across the broad mid-market and 4.7 per cent growth at the most affordable quarter of the market).
Similarly, premium dwelling values have risen by 10.1 per cent over the past twelve months compared with a 9.5 per cent and 7.5 per cent capital gain across the mid-market and most affordable quarter of the market respectively.
The latest data shows that rental rates continued to grow at a slower pace than dwelling values, further eroding rental yields across the capital cities.