Sydney’s home values have fully recovered from the downturn after gaining 0.6 per cent in May, the fastest pace of growth in three months, as a persistent supply shortfall outweighs the drag of higher interest rates, data from CoreLogic shows.

The city’s median dwelling value is on track to hit new highs in the coming weeks after bouncing back to $1,156,020, which matches the record set in January 2022. Since bottoming out in January last year, prices have increased by 14.1 per cent.