Newcastle house prices climbed 11.9 per cent to a record median of $671,500 last year, the highest growth in the Hunter.
A typical house in Newcastle has added $180,000 in value in five years, or $36,000 a year.
Domain property website's latest House Price Report shows the increase in the Newcastle local government area was well above the 6.7 per cent rise recorded across Sydney in 2020 and double the national average of 5.8 per cent.
"Changed lifestyle preferences post-lockdown and the option of remote working has driven demand to outer suburban and regional locations as buyers seek affordability, liveability, space and greater value for money," the report says.
Perth was the only state capital not to set a new median price record by the end of the year.
The Sydney median is above $1.2 million after a 4.8 per cent jump in the December quarter.
The report credits the recently buoyant market to low interest rates, government subsidies and a "remarkable recovery" in consumer confidence.
Port Stephens, where prices rose 11.8 per cent to a median of $635,000, was close behind Newcastle as the next best-performed council area in the Hunter.
Prices in Lake Macquarie were up 8.4 per cent to $645,000.
Newcastle's price growth outpaced Wollongong's (10.7 per cent), though the southern steel city has a much higher median at $775,000.
Cessnock (8.3 per cent), Maitland (7.5), Upper Hunter (6.6), Muswellbrook (5.8) and Singleton (3.4) also recorded rises in 2020, though the increases were less spectacular away from the coast.
The Domain report shows the Newcastle, Lake Macquarie, Cessnock and Maitland markets rose about 36 per cent in the past five years, an average annual increase of more than 7 per cent.
Port Stephens had the largest long-term price growth, 41.1 per cent over five years.
Singleton's 14.8 per cent growth since 2015 placed it behind only Armidale (9.8), Tamworth (13.1), Dubbo (12) and Inverell (0) in regional NSW.
Byron was easily the state's best performer with annual growth of 26 per cent and a five-year rise of 69.1 per cent.
The south coast communities of Kiama (20 per cent) and Shellharbour (19.4), the latter severely affected by last summer's bushfires, also recorded strong increases.
Byron and Kiama are the only council areas in regional NSW with median house prices above $1 million.
The gap between apartment and house values continued to widen in 2020 as three cities, Sydney, Brisbane and Canberra, recorded falls in unit prices.
IN OTHER NEWS: