The pecking order of Australia's premium property markets is experiencing its most dramatic realignment in years, with traditional hierarchies being challenged and new players climbing to the fore. In this context, we refer to luxury houses as houses priced in the top five per cent of the house market in each region.

At the top of the market, Sydney maintains its long-held position as Australia's most expensive luxury housing market, though the story is far from dynamic. Despite experiencing one of the slowest growth rates in recent years, the top 5 per cent of Sydney house prices now exceeds $4 million, creating a substantial lead over other markets that appears unassailable in the near term.

Perhaps the most compelling development is occurring in regional Queensland's coastal markets, particularly in comparison to Melbourne's modest performance. The Gold Coast, with an impressive 50 per cent growth over five years, has finally achieved what many predicted: overtaking Melbourne as the second most expensive luxury market. With the top five per cent of Gold Coast houses now priced at $2.54 million compared to Melbourne's $2.51 million, the shift represents a significant change in the market hierarchy. The Sunshine Coast appears set to follow suit, boasting a robust 48.73 per cent five-year growth rate and current top five per cent house price of $2.37 million. Given Melbourne's sluggish 9.75 per cent five-year growth rate, the Sunshine Coast is projected to join Sydney and the Gold Coast in the top three within the next 12 months.

The third notable shakeup involves the remarkable ascent of Brisbane, Perth, and Adelaide compared to Canberra's simultaneous decline. Both Brisbane and Perth have now surpassed the $2 million mark for houses in the top five per cent, driven by impressive five-year growth rates of 55 and 53 per cent respectively. Canberra, once a strong performer, has plummeted from fourth to seventh place in just five years, with the top five per cent of house prices stagnating at $1.95 million. Adelaide, despite currently sitting at $1.8 million, shows the strongest momentum of all capitals with a 56 per cent five-year growth rate, suggesting it may soon push Canberra to eight place.

Looking ahead, the market appears to be trending toward a new baseline, with all major cities except Darwin expected to reach or exceed the $2 million mark for luxury properties.