House prices across much of regional NSW are continuing to record strong annual growth despite a deepening national property downturn, with Dubbo, Orange, Bathurst and several other regional centres significantly outperforming Sydney.

New figures from Domain's September 2026 House Price Report reveal the median house price in the Dubbo Regional local government area has climbed 14.3 per cent over the past year, reaching $685,000 compared with $599,500 in September 2025.

Orange has experienced similarly strong growth, with its median house price increasing 12.6 per cent to $778,000, up from $691,000 a year earlier.

Bathurst Regional recorded an 11.4 per cent annual increase to $780,000, while the Mid-Western Regional council area, which includes Mudgee, experienced 7.9 per cent growth in median prices to $750,000.

The figures present a striking contrast to Sydney, where median house prices have fallen 5.8 per cent over the past year and 4.7 per cent in the September quarter alone.

Other regional NSW markets have delivered even stronger annual results.

Broken Hill recorded a 22.7 per cent increase, taking its median house price from $220,000 to $270,000, while Armidale Regional experienced 21.7 per cent growth to $670,000.

Berrigan recorded a 14.3 per cent increase to $480,000, Albury rose 12 per cent to $715,000, and Bega Valley climbed 7.7 per cent to $853,500.

The regional performance comes as Australia's capital city housing markets experience their most widespread downturn in 15 years.

Domain's report, released on Thursday, October 22, found house prices declined in all eight capital cities during the September quarter, only the second time this has occurred on record.

Combined capital city house prices fell 4.7 per cent during the quarter to $1,226,566, the steepest quarterly decline recorded by Domain.

Sydney's median house price dropped $82,420 during the quarter to $1,661,167, its lowest level in two years and almost 8 per cent below its December 2025 peak.

Perth recorded the largest quarterly decline, falling 7.4 per cent, followed by Brisbane at 5.4 per cent and Sydney at 4.7 per cent.

Melbourne prices declined 3.3 per cent, while Adelaide fell 3 per cent.

Domain chief residential economist Dr Nicola Powell said weaker confidence and reduced borrowing capacity were contributing to the downturn.

“Confidence has become one of the market’s biggest headwinds,” Dr Powell said.

She attributed weakening demand to higher interest rates, cost-of-living pressures and uncertainty about future property prices.

Independent research from property data company Cotality reinforces the difference between metropolitan and regional markets.

Its October 1 Home Value Index report found regional Australian dwelling values remained 5.6 per cent higher than a year earlier, compared with a 1.8 per cent annual decline across the combined capital cities.

However, Cotality also reported that 71 per cent of regional markets it monitored experienced falling values during September, suggesting regional areas are not immune to the broader slowdown.

While Domain's latest figures highlight substantial annual gains across central and western NSW, they do not necessarily indicate that prices continued rising during the most recent quarter.

With borrowing costs and affordability pressures continuing to constrain buyers, the coming months will determine whether regional NSW can maintain its advantage over the nation's weakening capital city markets.