According to the latest RP Data-Rismark Home Value Index, capital city dwelling values increased by 1.2 per cent during January, while rising by 2.7 per throughout the three months to the end of the same month.
The premium sector of the housing market in particular has gathered pace over the past six months, and is now showing higher capital gains than the broad middle and most affordable segments.
During this period, dwelling values across the most expensive quarter of the capital city markets were up 6.7 per cent compared with only 5.8 per cent across the broad mid-market, and 4.7 per cent at the most affordable quarter.
Capital city home prices have now risen 13.2 per cent since the beginning of the current growth cycle in June 2012, and currently sit 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."
The results also confirmed that Sydney and Melbourne are now well advanced in their growth cycle.
Rismark CEO Ben Skilbeck said that "while a moderation in growth is expected for Melbourne and, to a lesser extent, Sydney, strong population growth, an increasing appetite for housing credit and positive consumer sentiment means we are unlikely to see price declines in the near term."
"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."
Rental rates continued to grow at a slower pace than dwelling values, further eroding rental yields across the capital cities. The Melbourne and Sydney markets where dwelling values have shown the most appreciation are now showing gross yields for houses below 4 per cent, with he typical gross yield on a Melbourne and Sydney unit being at 4.2 per cent and 4.7 per cent gross respectively.
According to Mr Lawless, such a yield environment may potentially start acting as a disincentive to investors.
"With gross yields low in Melbourne, and not a lot better in Sydney, together with the fact that both these markets are well advanced in their growth cycle, it would suggest that investment fundamentals in these markets are waning. It is my view that investors will start seeking out the higher yields of Brisbane where the market is also far earlier in the growth cycle," he said.