Sydney clear winner in real estate revival

Sydney has become the first capital city to regain all of the ground lost since the onset of the 2010 property slump, while Melbourne has bucked predictions of further price falls.

Analysts at RP Data-Rismark report that Sydney dwelling values grew 1.5 per cent last month, capping a growth trend that began nearly a year ago.

This makes it the only city to fully recover the losses of the past three years, with values reaching a new peak last month.

Overall, Australia's housing market posted another strong month. Nearly every capital city experienced growth.

The national dwelling value rose 1.3 per cent last month - the second strongest monthly performance since the slump began.

Melbourne values rose 0.8 per cent over the month, seemingly contradicting the Reserve Bank's prediction last week that more falls were ahead for the city.

"[Nationally] the March 2013 result is one of the strongest we've seen over the three years since March 2010," said Rismark International chief executive Ben Skilbeck, who noted that only Adelaide experienced no growth.

RP Data senior research analyst Cameron Kusher said the market had been "quite strong in Sydney since May last year".

"Sydney has experienced a long period of sustained under-performance," he said.

"There's not a lot of new construction taking place but population growth is starting to ramp up again, which is what I really think is driving that market."

Dwelling values rose 0.4 per cent in Canberra, 1 per cent in Brisbane, 2.4 per cent in Darwin, 2.5 per cent in Hobart and 3.4 per cent in Perth.

But, unlike Sydney, values in virtually all the capital cities remain well below their 2010 peaks despite the recent growth trend. Brisbane is still 9.5 per cent down, and Melbourne is 6.2 per cent lower. The national dwelling value remains 3 per cent below its peak.