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Australian house prices rose 2.1 per cent in February from a month earlier, the biggest increase since August 2003, as record low interest rates and government stimulus measures attracted more buyers into the property market, raising fears of overheating, according to data released on Monday by real estate consultancy CoreLogic.
Australian house prices rose 4% in February compared with the same period last year.
House prices have risen in all major cities and regions, rising synchronously for the first time in more than a decade.
House prices in major cities rose by an average of 2% month-on-month, 2.6% higher than the same period last year. House prices in the regional market rose 2.1% month-on-month, 9.4% higher than the same period last year.
Sydney and Melbourne saw the biggest increases in house prices among major cities, rising 2.5 per cent and 2.1 per cent respectively from the previous month. Brisbane and Perth both rose 1.5 per cent.
However, Tim Lawless, head of research at CoreLogic, is sceptical that the rally can be sustained.
"it is not clear whether this new growth in Sydney and Melbourne can be sustained," he said. At the current rate of rise, it will not take long for house prices in the two most expensive cities to break through record highs. As household incomes are expected to remain depressed and stimulus packages are expected to dwindle, affordability is likely to be a challenge again in these cities. "