The median Sydney house price just sailed past $1 million again as five other cities hit new heights – but the coronavirus could throw a spanner in the works

• The median house in Sydney once again costs more than $1 million, as prices continue to swell.

• Prices are now at record highs again in Melbourne, Brisbane, Canberra, Hobart and Adelaide.

• The coronavirus outbreak and a probable interest rate cut in March could change market dynamics.

• Visit Business Insider Australia’s homepage for more stories.

The property boom prevails – for now.

Property prices soared 1.1% nationally in February, according to research house CoreLogic, pushing them to within just 1.2% of their 2017 high.

“At the current run rate of growth, the national index is likely to reach a new nominal high over the next two months,” CoreLogic head of research Tim Lawless said in its February report out on Monday.

Rapid-fire price growth has been enough for five cities – Melbourne, Brisbane, Canberra, Hobart and Adelaide – to set new record highs. While Sydney has seen the fastest growth of all capital cities, it has yet to return to the dizzying heights it reached in July 2017.

Even Perth has managed to etch out the first gains it has seen since 2014, adding 0.3% to prices over the last month. Darwin is still the lone straggler, as prices actually continue to fall in the Top End.

However, while recovery has been in full swing in Sydney and Melbourne, the coronavirus could throw a spanner in the works. On one hand, it has brought greater uncertainty to real estate markets. One of the clearest consequences may be that it could restrict Chinese demand in the market.

"In several real estate markets, we already see negative impacts," Chinese real estate Juwai notes in a February market update issued to Business Insider Australia. "These include a reduction in the in-person presence of Chinese buyers at auctions, a similar decrease at inspections, and the stalling between contract signing and final settlement of some transactions involving Chinese buyers."

However, while acknowledging the potential short-term impact, Juwai remains confident that strong Chinese interest will only be impacted short-term, noting "the Coronavirus apart, we expect to see further improvement in Chinese buyer demand in 2020".

On the domestic front, the coronavirus could, in fact, bring forward an expected interest rate cut, reducing the cost of borrowing and further stimulating property markets. While the RBA has been cautious in reducing the official cash rate, fearing it would only further encourage households to increase their debt, economists expect it will have little alternative when it meets on Tuesday.

However, as the virus remains uncontained and its impact on the Chinese, Australian and global economies as yet unknown, it will also begin to stoke recessionary fears. Whether or not that comes to pass, the anxiety it produces may see a rate cut used to pay off debt rather than accumulate more. In turn, it could plausibly push the pause button on the property market recovery temporarily.

While leading indicators of property price growth remain strong, the Commonwealth Bank acknowledges it may cannonball buying momentum.

"Auction clearance rates are firm, house price expectations continue to lift – including the home buying measure in our household spending intentions survey -- and the flow of credit has accelerated," CBA senior economist Gareth Aird said in a research note issued to Business Insider Australia.

"But the risk is that momentum in the property market slows based on the significant impact that COVID‑19 is having on both domestic and global economic activity and uncertainty. In addition, financial markets have been rocked over the past week and equity markets have been hammered," he added. "This may weigh on sentiment in the property market."

While that scenario remains a possibility, it hasn't yet emerged. Over the weekend, real estate remained as popular as ever with 83% of Sydney and 77% of Melbourne properties selling at auction, according to Domain's preliminary figures.

With the RBA to announce their decision on Tuesday, all eyes will be on how clearance rates fare on Saturday.