The PRDnationwide New Farm Area report found the area including the suburbs New Farm, Spring Hill, Fortitude Valley, Teneriffe, Newstead and Bowen Hills was experiencing strong growth with prices in the region growing a staggering 34.5 per cent from October 2007 to March 2008.
PRDnationwide Queensland research analyst Rebecca Kell, examines the historic and current activity of the area taking into account recent sales and median house prices to identify the trends of housing and unit activity in the area.
"Overall the New Farm market performed well, irrespective of sales being down during the March 2008 half year period," Ms Kell said.
The New Farm Area has progressed to record some of Queensland's highest median prices.
"Increasing median house prices for inner suburbs is a major trend being seen as owner occupiers and investors are becoming increasingly aware of the benefits that inner city living has to offer," said Ms Kell.
PRDnationwide New Farm principal Adam Gray said it was fast becoming a "blue chip area" and the prices were demand driven.
"The New Farm area is serviced by plenty of public transport including ferries, buses and trains and the local environment is inviting," he said.
"People are starting to realise that the development being done by Mirvac and FKP at Newstead River Park will change the face of Brisbane forever," he said.
"There is more to come with the redevelopment of Bowen Hills and Fortitude Valley as well as heaps of infrastructure projects."
Ms Kell said family homes in the New Farm Area were highly sought after.
"The 38.5 per cent drop in house sales is due to such low supply coming on to the market," she said.
The record growth rate of 34.5 per cent during the six month period was directly linked to this phenomenon.
"The record gain of $285,000 in only six months is due to significantly low supply," Ms Kell said.
Only 70 properties changed hands between October 2007 and March 2008.
Fourty of these transactions were in New Farm – the suburb achieved a median house price of $1,207,500.
"The majority of sales (in the six suburbs) occurred in the $1.2million-plus price bracket equating to 47 per cent of total registered sales," she said.
The area is known for its "apartment living".
"Over 85 per cent of the New Farm Area's residential stock is defined as unit, apartment and townhouses" Ms Kell said.
The median unit price recorded during October 2007 to March 2008 was $425,000, a growth rate of 16.4 per cent.
"The high supply of apartment stock in comparison to housing stock within the New Farm Area has enabled the apartment market to experience a more consistent, steady growth at a rate of 9.3 per cent per annum over the past five years," she said.
From the 511 transactions recorded during the year ending March 2008, the majority of sales occurred in New Farm with 133 settled transactions.
"The apartments ranged in price from $165,000 recorded in Fortitude Valley to $3.6million in New Farm showing the diversity of properties in the area," she said.
"The Mirvac Waterfront development reportedly made an unconditional sale on the penthouse of $14.25 million."
The New Farm Area is home to many landmarks of Brisbane including Brunswick Street Mall, New Farm Park, Newstead Park, live music venues, The Powerhouse, countless art galleries, theatres, performance spaces, restaurants, cafes and bars.