Property values that rose to new highs in January have further to go as record low borrowing costs, stimulus payments and low stock levels send prices racing higher in smaller cities and regional areas. The favourable conditions in 2020 prompted the most new home loans for three years, a report on Monday showed.

Data provider CoreLogic’s index of dwelling values rose 0.9 per cent in January from December, and was up 3 per cent year-on-year, as the 1.6 per cent monthly jump in regional prices more than doubled the 0.7 per cent increase across the combined average of capital cities.