The property market has gained momentum with house prices enjoying their sharpest monthly rise in more than four years.

Key points: Home prices have risen 5.7pc since their trough, but are still short of their peak

Home prices have risen 5.7pc since their trough, but are still short of their peak Melbourne (+2.3pc) and Sydney (+1.7pc) lead the national market rise of 1.2pc in October

Melbourne (+2.3pc) and Sydney (+1.7pc) lead the national market rise of 1.2pc in October More properties are being put up for sale, but volumes are still 17pc below their average

Nationally house prices rose 1.2 per cent over October, the fourth consecutive month of rising values recorded by the CoreLogic Home Value Index.

Once again the biggest markets of Melbourne and Sydney underpinned the overall strong result.

The Melbourne property market rose 2.3 per cent and Sydney 1.7 per cent. Perth was the only capital city to record a fall, down 0.4 per cent.

CoreLogic research director Tim Lawless said there are a number of factors behind the comparatively stronger rebound in Melbourne and Sydney.

"Tighter labour market conditions and stronger population growth relative to the other capitals, coupled with the stimulatory effect of the lowest mortgage rates since the 1950s, and improved access to credit," Mr Lawless noted as the key drivers.

Mr Lawless said stamp duty exemptions for first-home buyers were also driving demand under specific price points.

"Accompanying the trend towards higher housing values has been an increase in sales activity," Mr Lawless said.

"Although the annual number of settled sales remain around 17 per cent below the decade average, there has been a clear upwards trend in buyer activity since June."

Market trough

On CoreLogic's estimation the housing market appears to have troughed in June.

However, they are still below their peak with the 5.7 per cent gain since then still yet to make up for the more than 8 per cent decline over the preceding 10 months.

Mr Lawless said the smaller capitals have delivered a mixed performance, although the general theme is one of improving conditions.

On a rolling quarterly basis, Melbourne and Sydney were up more than 5 per cent, leaving a fair gap in performance to Canberra (+2.4 per cent), Brisbane (+1.1 per cent) and Hobart (+1 per cent).

While Adelaide put on just 0.1 per cent, it is still its strongest three-month gain since late last year.

"The downwards trend in Perth and Darwin home values has continued; however, both markets are showing an improvement in the trend rate of decline," Mr Lawless said.

"The rolling three-month trend in Perth housing values recorded the smallest decline in 14 months (-1.7 per cent) and Darwin dwelling values posted a rare monthly rise in October."

Both cities have been the hardest hit by the property downturn, with Darwin down a cumulative 31 per cent and Perth values 22 per cent lower since mid-2014.

Low volumes

While there are more buyers nationally, the number of new listings of properties for sale are still much lower than 12 months ago, and down near GFC levels.

"There has been a shortage of new listings for several years which has likely resulted in some pent-up demand from home owners looking to sell," Mr Lawless said.

Mr Lawless noted the paucity of stock for sale was likely a reflection of ongoing uncertainty and low confidence.

"Measures of consumer sentiment have been trending lower, with households reading through the low interest rate setting to the underlying weakness in Australia's economy," he said.