Documents show a plan for 320 lots in the block north of Clydesdale Drive, crossing the Bonshaw Creek in an Urban Growth Zone.

The applicant, CardnoTGM, has been phoned for comment.

It's the latest application in a booming market in Ballarat's south-west, stretching from Sebastopol to Cardigan.

City of Ballarat mayor Ben Taylor said the application was in its initial stages, but said it was a sign the city was "ready" for the accelerated residential growth.

"We've had 1000 (proposed lots) from Integra (at Lucas), we've had hundred or so ones before, 300 now, it's showing that Ballarat is ready for development," he said.

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"Council's working on, fingers crossed, within two years our northern growth zone and south-west (zone) online, there's another 40,000 people."

However, he cautioned infrastructure would need to keep up, and council was working with Regional Roads Victoria and Central Highlands Water to make sure the area was ready for hundreds of new homeowners.

"We need to make sure we're ahead of the curve - we're looking at an integrated transport strategy that's coming online very soon, the draft will be out to the comm in the next week or so, how (public transport) all works together," he said.

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"It's how we're growing, what we need, looking at pinch points, and then the next stage is identifying and working with the individual sites as we go, it's a critical piece of work."

Despite the growth, Cr Taylor emphasised Ballarat also needed a thriving CBD - he demurred when asked if there was potential for small or medium businesses, like restaurants and bars, in the growing residential areas.

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"But, in all this growth, the most important thing, is the CBD - we've got to understand, the CBD has to be vibrant, and as part of that growth, we have to make sure there's people living in the CBD," he said.

"It's important we don't just push out.

"I prefer business here, rather than little businesses elsewhere, I prefer Ballarat to be a hub."

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