Investors are returning to a national residential property market as values rose at their fastest pace in almost 17 years in February, with ultra-cheap credit and low stock levels putting Sydney and Melbourne on track to hit record highs.

Rising prices lifted home values 2.1 per cent nationwide – the highest national increase since August 2003, CoreLogic figures showed; a separate Australian Bureau of Statistics report showed new home loans to investors jumped 9.4 per cent in January, the biggest gain in more than four years.