Unit prices in the city had jumped by 13.1 per cent in the year to February 28, outstripping that of houses (7.1 per cent), according to the latest report by Australian Property Monitors.

The median unit price in Dubbo was $226,000.

"In the past 12 months, Dubbo has emerged on the national scene as a regional city of growth," Dubbo real estate agent Bob Berry said.

"We sold a block of units in Central/South Dubbo recently which had offers over $730,000, and there were 10 would-be buyers who submitted written offers.

"Since then, some unsuccessful buyers made offers on blocks of units which were not even on the market.

"A couple of weeks ago we had an enquiry from a buyer's agent acting on behalf of a client who works on an oil and gas rig in Canada.

"This buyer's agent indicated they had identified Dubbo as one of three regional cities in NSW they were focusing their clients' attention on.

"They indicated they were now not investing in mining-only centres. They are attracted to the diverse economy of Dubbo. The market has looked and liked the opportunities it sees."

With the internet and the kinds of housing statistics made available to the public today, investors had a much greater scope for investment, Mr Berry said.

"Ten years ago the kind of data we have was not widely available as it is today," he said.

Mr Berry said the investment dynamic in Dubbo had begun to change, and that was expected to continue.

"Using housing and rental return figures investors are seeing opportunities for both passive investment and investment in development.

"Those buyers are either investors or owner-occupiers, and if it's the latter it's lost to the rental market.

"If that dynamic keeps going we will have a lot of older flats and units purchased by investors to upgrade or renovate for either strata sale or into a higher rental market."

That exercise was made all the more attractive by the fact that type of investor did not need to be a licensed builder, did not require a council development application and it was tax deductible, producing profit or capital growth, Mr Berry said.

Given there had not been a new block of flats or units built in the city since 1994, and most were 30 to 40 years old, he said, they were a prime target for investors and developers.

"That kind of refurbishment is happening and will continue to happen," he said.

"In Dubbo we will have a far different landscape of tenants in five years' time to what we do now.

"There will be plenty of tenants for refurbished two-bedroom units but they will be at a much higher rental.

"There is a section of the community in the next five years that will really have pressure on their budgets to get affordable rental accommodation.

"And it remains a challenge for first homebuyers on fixed incomes who are saving up to buy a house while rents are going up."

Mr Berry said approval of the South Dubbo rezoning proposal to be voted on at Council's next monthly meeting would be a step in the right direction.

"The main challenge for the city into the immediate future continues to be to increase the supply of housing stock for the entire community," he said.

"Any councillor who is taking a long-term view of Dubbo and the provision of housing for the community will adopt council's own proposal.

"I will be staggered if any councillor who looks at the total Dubbo housing marketplace, in particular, the needs of the ageing community in the next 30 years, does not vote to proceed with Council's own rezoning proposal."

It was a proposal that had planning, economic and social implications, he said.

"If Council doesn't support its own proposal it will impose social problems on this city," he said.

"You can't have anything more basically social than a roof over someone's head."