Lindfield houses came out on top, earning $198,471 more than many households did in the year ending December, according to Domain data.

The median house price for the upper north shore suburb jumped 12.5 per cent to $2.7 million – an increase of $300,000 over the year, nearly triple the post-tax annual household income of $101,529.

It comes as wage growth stagnates and property prices rise this year off the back of a remarkable turnaround last year.

Multiple rate increases, relaxed lending criteria and certainty around housing policies fuelled the turnaround last year, but this year a shortage of homes on the market coupled with a surge of buyer demand have continued to push prices up.

Other suburbs where house price growth out-earned the average median income included Cammeray, which grew 11.7 per cent – or $237,500 – compared to the average median household post-tax income of $96,144 and wages growth of 2.2 per cent.

It was followed by North Bondi, where the median house price jumped 9.2 per cent – or $189,000 – to $2.795 million, compared to the average median household income of $102,627.

Domain senior research analyst Nicola Powell said some of these suburbs have led the recovery because they also led the downturn.

“When you have a look at recovery of prices, those higher priced areas have rebounded first,” Dr Powell said, adding that there was a broader rebound across the city to varying degrees.

“Many of these areas are family-orientated, owner-occupied dominated areas.”

Sydney suburbs where price growth outpaced household income

For Tim Cohen, who works in construction, listing his Lindfield property was a matter of timing despite loving the area and the house and being reluctant to let it go.

“I had the option to sell last year but I decided not to. We were holding onto it because we loved Lindfield and the house,” he said. “We have timed the market well, but then again I didn’t need to sell. I wasn’t going to sell in a down market either.”

McGrath Lindfield selling agent Sarah Davis said the area was highly sought-after for its proximity to shops, schools and the local train station.

“The more attractive a suburb becomes, the more wealthy it becomes … it drives the prices up and becomes a destination suburb.”

CommSec senior economist Ryan Felsman said the strong unit price recovery in Rushcutters Bay was an anomaly.

“It stands out because it’s well-positioned and it’s going through a renaissance with its gentrification,” Mr Felsman said. “A lot of enhancements [are being made] to older buildings and redevelopment of shop fronts and businesses that were victims of the lockout laws.

“It’s highly sought-after by young professionals who would have high disposable income.”

Marsfield and Parramatta were also among the top 10, where house price growth outpaced their post-tax household incomes by $72,004 and $69,363, respectively.

Mr Felsman said both were beneficiaries of improved transport links and infrastructure projects, becoming highly sought as a result.

“Marsfied would do well firstly in terms of houses because there’s not many, it’s mainly apartments. Certainly Macquarie University is nearby and the broader Marsfield technology park-focused sector is within walking distance and there’s a train station as well.”

He said Parramatta was benefitting from the light rail project, the western Sydney metro as well as a whole host of other projects, including the relocation of the Powerhouse Museum, an upgrade of Western Sydney University campus and the recent completion of the BankWest Stadium.

Outside of Sydney, Burradoo in the Southern Highlands recorded a strong recovery with its median house price jumping 12.3 per cent – or $187,500 – to $1,712,500 compared to the area’s median household post-tax income of $73,897.

About 60 per cent of homes in the postcode are owned outright, according to Dr Powell.

“Residents in the area are real winners … almost 60 per cent of residents in the area are couples without children … it indicates a real retirement suburb and it’s one of the most elite suburbs in the Southern Highlands.”

EY Oceania chief economist Jo Masters said there were expensive costs associated with owning a home with a mortgage as opposed to owning it outright.

“Your home is not liquid. That money doesn’t land into your bank account every month,” Ms Masters said.

Grattan Institute research fellow Brendan Coates said rising house prices wiped out almost all improvements in affordability in the recent downturn.

“We’re seeing a growing divide once again between the housing haves and have nots, especially in Sydney,” he said. “Home owners’ wealth has surged again recently due to rising house prices. Younger people and those with lower incomes who have missed out on buying a house are again being left behind.”