It's no secret the Australian property market has been tough over the past couple of years, but a report out today from Australian Property Monitors (APM) shows early signs of recovery.

APM's latest house price report says median house prices have risen nationally for the first time since September 2010. Following five consecutive quarterly falls, it's a sign that the market may be turning around.

The report found Melbourne led the nation in capital city median house price growth, increasing by 1.1 per cent. Sydney home prices held their ground over the quarter following a fall of 1.8 per cent over the September quarter. The report says the rise in the national median house prices reflects activity in the Sydney and Melbourne housing markets over the December quarter.

This week FNN spoke with senior economist from APM, Dr Andrew Wilson, about the report's findings; how the Sydney auction market ran out of steam in 2011; and how prestige properties drove growth in Melbourne.