Average home prices hit $1m with more growth to come

Australia's property market continues to strengthen and gain momentum as the value of the average home soars past the $1 million mark for the first time.

The national mean dwelling price reached $1,002,500 in the March quarter, a 0.7 per cent increase from the previous three months, according to Australian Bureau of Statistics figures released on Tuesday.

The Real Estate Institute of Australia expects prices to continue rising, although the pace of growth is unlikely to return to the levels seen during the COVID-19 property boom.

Figures from the ABS show the total value of the nation's residential dwellings rose by $130.7 billion to a staggering $11.4 trillion.

Real Estate Institute of Australia President Leanne Pilkington expects house prices to continue to rise for the rest of the year.

"We're certainly not going to see the massive increases that we saw during COVID, but we do think house prices will continue to increase, particularly as interest rates are predicted to fall further," she told AAP.

Prime Minister Anthony Albanese, speaking at the National Press Club on Tuesday, noted that regulation and red tape had made building and buying a home in Australia too hard.

Mr Albanese said it was too complex and expensive to get a project off the ground, adding that Housing Minister Clare O'Neil had been tasked with reducing those barriers.

"It is too hard and one of the areas is regulation," he told the National Press Club.

He also backed a failed NSW project to redevelop Sydney's Rosehill Racecourse, describing the controversial proposal as "absolutely right".

The proposal aimed to transform the 140-year-old track into a "mini-city" encompassing about 25,000 homes, but it was ultimately voted down by the racecourse owner's members.

"That's the sort of thing that we're going to need to do. You can't deal with supply issues without having the courage to do things like that," Mr Albanese said.

"(We) want to make sure that housing is fit for purpose and all of that but if we can cut through on some of the red tape, then that will reduce costs."

According to the ABS, the increase in residential dwellings was fuelled by housing markets in Queensland, Western Australia and South Australia.

While NSW remains Australia's most expensive property market with a median price of $1.25 million, Queensland is not far behind at $944,700.

Though prices are rising, further interest rate cuts could slow the pace of increases compared to the same period last year.

Data reveals the average price in the ACT went backwards, falling to $941,300, as the Northern Territory maintains the lowest mean price at $517,700.

Eliza Owen, head of research at property analyst group Cotality, told AAP it was not a surprise the nation's property market continued to be pushed to record values.

"(It comes) off the back of long-term constraint on housing supply, compounded by more recent factors like interest rate reductions, which increase access to finance," she said.

Ms Owen noted the interest rate reduction earlier this year helped reinvigorate demand across the housing market on a fairly broad basis.

While the average dwelling price has reached seven figures for the first time, Ms Owen said factors such as rate reductions had given markets like Sydney a "sugar hit", rather than triggering a large upswing like the robust growth seen in 2021.