The cost of buying a house on Sydney’s northern beaches has jumped by a jaw-dropping $867,500 over the past year, new data reveals, equating to a cool $417 an hour based on a 40-hour working week.

The median house price for the region is now $2,747,500, up 46.1 per cent to the year ending September, the latest Domain House Price Report, released on Thursday shows.

Prior to the pandemic, the median house price in the region was sitting at $1.9 million but a rising tide of cashed-up buyers from across Sydney looking for land and lifestyle has seen both people and prices push north.

Once snubbed for being too far from the CBD for city workers, the lockdown has given the region an entirely new appeal that ticks all the boxes for the new world order, agents say, in which working from home has become the norm.

It’s just far enough from the city to feel like a world away, yet close enough to complete the commute into work once or twice a week if needed, said Cunninghams Real Estate managing director John Cunningham.

“It’s the fact that people are now not only valuing their internal space in the home, they’re valuing where they live. They want to be on the coast [and] accessible to the harbour, bush and beaches. The transport to the city concept is no longer such a big thing,” he said .

But demand has outstripped supply and caused a meteoric house price rises this year that would not be sustained into next year, he said.

“You can’t have another year of a 46 per cent increase,” he said. “One thing we do know is that more people want to move here than leave here [but] affordability will disappear and mortgage stress will increase.”

The northern beaches housing market has galloped away even from the city-wide median of $1,499,126, which rose 30.4 per cent over the past year. Demand on the Northern Beaches has been mainly driven by owner-occupiers and returning ex-pats, with buyers searching for months on end and regularly missing out at auction half a dozen times.

In one month, three cashed-up buyers traded up their small eastern suburbs properties for large houses on decent parcels of land in Allambie Heights, Mr Cunningham said.

One buyer traded their Edgecliff home for $2.5 million and bought a house for $3.2 million, while another sold a semi-detached house for $2.3 million and bought a free-standing house for $2.75 million.

It was competition from buyers like these that kept locals Nathan Hampson and his partner Caz Pattison in a nightmare buyer’s loop for an entire year until they finally nabbed a house in Avalon Beach for $2.27 million.

They began with a maximum budget of $1.8 million last Christmas but were quickly priced out.

“All of sudden there was nothing at all for $1.8 million. We were thinking we don’t have a hope. What was the achievable dream was punched out by $500,000,” Mr Hampson said.

After compromising on their criteria of a garage and a backyard with a lawn, they put in a pre-auction offer on their Avalon Beach property. Mr Hampson believes it was accepted in the end because they formed an emotional connection with the downsizing vendors during their inspection one afternoon.

“A lawn would have been nice but it’s not the end of the world. It’s all just worked out; it’s crazy. I can’t believe it.”

Their mortgage broker and principal at Mortgage Choice Dee Why James Algar said he had never seen so many big-ticket sales in the region.

“There have been 18 or 20 sales north of $4.5 million just in Collaroy when the previous year there was less than half of that,” Mr Algar said. “I’ve had four clients sell this month to buyers from the other side of the harbour.”

These areas included Hunters Hill, Balmain and two lower north shore buyers.

As a result, the unit market has picked up too, with the median price in the northern beaches rising 34.2 per cent to $1.25 million in the year ending September.

Again, it is streets ahead of the citywide unit median of $802,475, which rose just 9.5 per cent in the same period.

“I can’t remember a time where we’ve seen so many two and three-bedroom units trading close to $2 million,” Mr Algar said, adding that units would continue to grow in the new year as a result.

LJ Hooker Avalon Beach’s principal Peter Robinson said buyers from the eastern suburbs were trading up in droves,  having realised they got a lot more property for their money on the northern beaches.

“When you look at this area, we’re relatively cheap. A lot of people have done well in other areas … [they say] I can take my $5 million or $10 million home from the eastern suburbs postage stamp parcel of land and move up this way [where] I can get over 1000-square-metres of land with a palatial-style family home right on the beach.”

The region’s skyrocketing prices had been driven not only by buyers willing to relocate permanently to the peninsula but also by part-time residents and holiday home buyers, he said.

While he conceded the price rises would not last, he said the area was well-placed to hold its value for some time: “I don’t think come October 2022 we’re looking at growth at 46.1 per cent,” he said.

“This place is really insulated well now; the demand is very consistent. It’s no coincidence that areas within an hour and a half, that offer something on a lifestyle basis, are becoming increasingly popular.”