What are the biggest problems facing the housing market?

Home prices in the Brisbane suburb of Bourke have hit a new record high of $1.2 million, according to a new report by the alliance property management company.

The benchmark price of $850,000 for a home in Bourke hit $1 million on Wednesday, according the index, which is based on the median price of houses in the state.

It is the highest price the index has seen since it started in 2017.

The price of homes in the region has soared in recent years, driven by a boom in demand from new residents and foreign buyers.

The median price in the Sydney suburb of Parramatta rose 5.5 per cent to $1,270,800 last month, according a report by real estate research firm Zillow.

“The strong price increase is a direct result of strong demand from foreign buyers and a strong housing market,” said Zillows chief economist Robyn Jones.

“But the fact that Bourke has seen so much more demand than the rest of the state is also a factor.”

The index is based largely on the prices of homes that are under contract.

The report also notes that Bourkes average house price has risen more than 12 per cent over the past decade.

“While there have been signs of a modest cooling of prices over the last year, the housing sector is still in an unprecedented bubble,” Ms Jones said.

“Bourke is an interesting example of the housing bubble that is bursting in Australia.”

The property market is also the focus of intense scrutiny as it looks to rebuild the state’s economy.

On Tuesday, Treasurer Scott Morrison announced $300 million in tax breaks for homebuyers, including $20 million in a one-off package.

But the Coalition has yet to provide details on how it will distribute the money, and the measures could have a knock-on effect on the housing supply in the country’s biggest city.

Mr Morrison also announced $1 billion for the local housing authority to provide emergency housing.

But there have also been calls to cut spending and increase revenue.

“This government is making a major gamble in a short space of time with this massive increase in spending, particularly on the infrastructure front,” Mr Morrison said on Tuesday.

“It will only be good for the economy if this money is used for the people of Bourkes.”

The latest index figures were released after the NSW Government released a report that found the state was on track to achieve its fiscal deficit targets by March.

A statement from Mr Morrison’s office said the Government was committed to delivering on the $1 trillion economic plan and that it was “fully committed to working closely with the industry to deliver the most efficient and cost-effective economic plan”.

The Coalition’s budget is expected to be released on Thursday.