The latest Cotality report shows a clear split across Australia’s housing market.

Perth is leading the way, with home values up 2.3% in February, adding around $22,500 to the median price. Listings in Perth are also sitting 48% below the five-year average, which is driving strong buyer competition and pushing higher prices.

Meanwhile, Sydney and Melbourne have stayed put following the February rate rise. Values were steady over the month and slightly down over the quarter, while new listings have increased as more vendors are looking to sell.

Cotality’s research director, Tim Lawless, noted that the slowdown in Sydney and Melbourne could eventually flow through to other markets. However, for now, the mid-sized capitals continue to be supported by extremely low stock levels, which is keeping upward pressure on prices.

The key takeaway? Stock levels are driving the market, and right now, cities with the least supply are seeing the largest price growth.