After a subdued 2012/13 year, where values only lifted by around 3 per cent, RP Data says dwelling values across the country rose by 10.1 per cent in the 2013/14 financial year with the median home price valued at $545,000.
All capitals enjoyed increases with Sydney recording the best, up 15.4 per cent, followed by Melbourne with 9.4 per cent growth.
Investors and upgraders have driven prices in those cities, with foreign buyers also playing their part.
Hobart had the weakest growth, up 2.5 per cent, but is the most affordable capital with the median price of $328,250.
The results come as the Reserve Bank left the official cash rate on hold at 2.5 per cent for the 11th straight month.
While record low interest rates have played their part in supporting house price growth, other factors have also contributed.
In its accompanying statement today, the RBA noted a "strong expansion in housing construction is now under way".
This expansion is what will ultimately lead to a rebalancing in house prices in the future.
BIS Shrapnel says there is a shortfall of around 99,000 homes right now, with demand exceeding supply.
However a housing construction boom across the country will eventually fill those gaps, with the forecaster expecting vulnerable prices in most capital cities by 2016/17, with some cities feeling those effects faster than others.
