Sydney has consistently been perceived as the most expensive city to live in Australia. However, this is no longer the case according to recent data.

The major harbour city once held the mantle for having the most expensive median house prices but has lost that title to Byron Bay.

New research from property market firm Propertyology identified the top 40 most expensive cities by median house price.

The study indicates that Australia’s most populous city has officially lost its former number one position to the bohemian paradise.

Sydney loses mantle as most expensive property market (Getty)

The nation’s most valuable real estate is now based in a luxury seaside town that holds just 34,000 people.

Simon Pressley, head of research for Propertylogy confirmed the trendy oasis has been a major source of capital growth, and has also overtaken two capital cities to become the priciest.

“With a population of just 34,500 people and a median house price of $987,500, Australia’s most expensive city is Byron Bay in Northern New South Wales,” Mr Pressley said.

(Supplied)

“Byron’s median house price increased by a whopping 64 per cent over the past five years, propelling it to the top of the national table.

“Sydney and Melbourne both produced a 44 per cent increase over the same five years to be $950,000 and $772,500, respectively.”

This gap is predicted to widen as Sydney and Melbourne’s housing prices continue to plummet, and Byron Bay’s house prices rise.

Byron Bay property market growth

The fact that Byron sits at the number one spot proves that small population size doesn’t impact capital appreciation.

“It’s staggering that Byron has averaged double-digit growth every single year for two decades. I doubt whether there’s another city anywhere in the world that has done that,” Pressley said.

Byron Bay houses most valuable real estate (Getty)

There are several factors that continue to drive the property market in Byron Bay.

“In Byron’s case, housing demand is primarily driven by the affluent, middle-aged, Australian-born couple. Census data shows Byron’s median household age is 44 – compared to the national average of 38 – and there’s a below-average number of children per household as well.”

More people tend to own their homes outright than the national average. And buyers are attracted to the peaceful regional lifestyle, and convenience.

“Byron is only a two-hour drive up the highway to Brisbane or a one-hour flight to Sydney via Ballina, plus the Gold Coast international airport is also only an hour away,” Mr Pressley said.

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