Orange house prices have soared by a whopping 11.8 per cent in the past year to an average $370,000.
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And they are forecast to hit $400,000 by the end of the year.
The Domain Regional State of the Market report for June showed that after a flat period earlier this year the median price of houses has risen 7.2 per cent in the past three months.
It is the biggest increase for any area in the Central West – although the average housing price is still below Bathurst at $417,000.
Orange rents were also up by 1.5 per cent to an average $355 a week – the highest in the Central West.
Domain chief economist Dr Andrew Wilson said Orange presented “irresistible value” to Sydney and coastal buyers.
He said the median price of a house in Sydney was now just below $1.2 million, forcing home buyers and investors to look along the NSW coast and regional areas for places to buy.
“The heat has moved north [from Sydney] and now south,” he said.
“The next driver is the west and Orange [will be] the first cab off the rank.”
Dr Wilson described the surge in Orange prices as “hefty” and forecast prices hitting $400,000 within six months.
“After a period of relatively subdued buyer activity, the Orange region is now in revival mode.
“The Orange market is certainly in a catch-up mode.
“The market is growing quite strongly and presents irresistible value.”
Director of McCormack Barber Real Estate Peter McCormack said the price increase was being driven by a shortage of houses for sale and for rent in Orange.
Mr McCormack said 2016 saw the second-highest number of house sales in Orange on record after 2003.
He said that by March-April this year demand, particularly from Sydney investors, exceeded supply leading to prices going up.
Mr McCormack said currently three of out of every 10 buyers were investors, compared to just one out of 20 for most of last year.
And he said the number of places available for rent was also well down which in turn had led to rents rising.
“Everything has been driven from the rent prices going up,” he said.
Mr McCormack forecast prices would continue to rise with first home buyers coming back into the market from July 1 with the help of new government assistance.
He said a four-bedroom, two bathroom house with a great view in Wolsley Street for sale at $369,000 was indicative of what a median priced house in Orange offered.
