Growth over the June quarter saw Sydney home prices leap 8.4 per cent to hit $1,000,616, surpassing median prices in London and drawing closer to New York, according to the Domain House Price Report.
Domain Senior Economist Andrew Wilson says Sydney is the standout city in Australia in terms of property price growth.
"Sydney's median house price has increased by 22.9 per cent over the 2014-15 financial year, which is one of the highest annual growth rates ever recorded by the city," Dr Wilson said.
"It's a result that is now exceeding the boom time results of 2001 and 2002."
The Property Council of Australia said Sydney homebuyers were enduring the "double whammy" of rampaging property prices and higher stamp duty bills.
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"We know the average stamp duty bill in Sydney has increased by 750 per cent over the last 20 years, and is poised to accelerate further with rising house prices," the council's NSW executive director Glenn Byres said.
Housing supply needs to increase: Hockey
Treasurer Joe Hockey says increasing housing supply is the only way to tackle extraordinary demand in
the Sydney market.
"We are even prepared to consider a range of different initiatives that will help to address that supply logjam," he told reporters in Sydney on Thursday.
