Australian dwelling prices have experienced their largest monthly increase since October last year, rising by 0.8 per cent in May, with the middle-valued home in Australia now worth $785,556, according to new data released by CoreLogic.

It also marks the 16th straight month of price increases, as demand for housing remains well above the low levels of supply across the country.

Sydney remains the most expensive capital city with a median home price of $1.15 million — including both standalone houses and apartments — after recording 0.6 per cent growth during May.

However, Brisbane has now become the second-most expensive city for housing in the country, with prices jumping by 1.4 per cent during the month, and taking the median property price to $843,231.