PRD Nationwide's Newcastle property watch issued to the Newcastle Herald found a 12.3 per cent increase in the Newcastle median house price to $365,000 in the year to March.

Over the same time, Adamstown had the strongest median house price growth of 28.6 per cent to $421,000.

"This is the first significant increase in median price since the boom of the Australian property market in early 2001," the report said.

"It appears that the Newcastle house market appears to be moving from the bottom of the property cycle and shifting towards another period of solid growth."

PRD Nationwide Newcastle and Lake Macquarie residential property director Mark Kentwell said Maryville had been the strongest performing affordable suburb and Adamstown the strongest of the family suburbs.

He said the growth in Birmingham Gardens, Waratah West, Jesmond and North Lambton was heavily driven by first-home buyers and the proximity to Newcastle University.

But he said it was important to understand the "staggering growth" in the top suburbs had been in the median sale price and not necessarily across all price brackets.

"What drove it so heavily was the government incentive fuelled first-home buyers and a returning investor presence in the market because of lower interest rates and increasing rent," Mr Kentwell said.

"Suburbs like Adamstown, however, can celebrate the growth in all price brackets, with record sales to support."

This week's sale of 10 Jefferson Street, Adamstown, for a street record $860,000 shows the price rise in the suburb. According to Australian Property Monitors, the four-bedroom house sold in May 2009 for $785,000.