Melbourne's housing market has posted its strongest performance for the March quarter in more than a decade, bolstering claims that the city is emerging from its three-year property slump.
The latest price data from the Real Estate Institute of Victoria also shows a handful of inner and middle suburbs have seen their median house prices reach a new peak.
This included Brighton, which broke the $2 million barrier for the first time.
A lull in activity after the Christmas holidays historically makes the March quarter the weakest period for the city's property market, but this year it bucked the trend on the back of low mortgage lending rates and rising auction clearance rates, according to the REIV.
Melbourne's median house price fell 0.9 per cent over the three months.
This represents the lowest decline for the period since March 2001. (Seasonally adjusted, it rose 5.1 per cent over the quarter.)
"It's the strongest March quarter we've seen in more than a decade," the REIV's Robert Larocca said.
"Generally speaking, it's the inner and middle suburbs that have been pushing the growth, but the rises still aren't occurring across the board."
The auction clearance rate rose to 67 per cent in March, up from 60 per cent the year before.
Four suburbs in different parts of the city - Brighton, Doncaster, Northcote and Yarraville - have even regained all the price growth lost during the slump, and hit new peaks.
But the REIV sounded a note of caution in the light of the state's weakening economy, soft employment conditions and flagging consumer confidence.
"While the market is in an upswing phase, it's not going to be like 2009-10 when we saw 18-20 per cent price growth," Mr Larocca said. "This is much more moderate."
Louis Christopher, managing director of the analyst group SQM Research, said Melbourne appeared to be entering a "modest" and "tentative" recovery phase. "There is still a lot of property on the market that has not sold, and our own data indicates many vendors are still having to reduce their asking prices," he said.
The latest figures follow mixed messages about the state of the economy, property sector and consumer confidence.
Earlier this week, the Westpac Melbourne Institute Index of Consumer Sentiment fell sharply, emphasising how fragile consumer confidence had become "in the current environment".
But soon after, another Westpac survey found consumers' confidence that prices would rise was at its highest since July 2010.
Earlier this week, at a Bloomberg economic conference, an academic, Steve Keen, claimed that the recent house price growth was the result of speculative investor activity. "All the growth in debt has come from people speculating on rising house prices, not by people owner-occupying," he said.
"I think we're going through a rally - I'm calling a suckers' rally."
But senior economists from Westpac and National Australia Bank said Australia would experience some modest improvement in home prices, though home buyers would remain conservative about taking on debt.
"We're not looking for another huge surge in prices or activity that we saw in, say 2009, or that we saw in 2001," Westpac's chief economist, Bill Evans, said.