And Real Estate Institute of Victoria president Leah Calnan predicts the whole of regional Victoria will surpass the metropolitan region within two years, forcing councils and shires to open up more land or risk pricing locals and new residents out of the market.

Statistics from the Real Estate Institute of Victoria show Ballarat's housing median price has jumped by 33.9 per cent in the period September 2015 to September 2020.

In comparison, Melbourne's growth in that same period is 32.4 per cent.

With the full effects of the COVID-19 post-pandemic migration out of cities still to be felt and the soon-to-open GovHub bringing upwards of 600 new families to the city, it means Ballarat at its current state could run out of land within two years.

This is why the City of Ballarat is keen to open up the Mount Rowan area to the north of the city "as a matter of priority" this council term.

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Mayor Daniel Moloney said the migration from Melbourne to Ballarat would be significant in the coming years.

"It's mostly a positive thing due to impact on retail and hospitality but general affordability we need to be conscious of," Cr Moloney said.

"It's why we've identified the opening up of some more land in Mount Rowan and that will be a priority of the council, or we'll run out of land within two years."

But while Ballarat is now showing a greater growth rate than Melbourne, the figures pale in comparison to areas just north with Hepburn the leading area for price rises in the state.

Remarkably, Hepburn has shown a five-year increase of 57.2 per cent as cashed-up Melbourne residents seek out a tree-change in places like Daylesford. This has also led to the lack of rental availability in the region.

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A quick search of rental availability across Hepburn made grim reading on Tuesday, with just one property for rent in Daylesford, one in Hepburn and one in Trentham. Even fast growing Ballan had just 12 properties for rent, Smythes Creek four and Beaufort and Avoca one each.

In comparison Ballarat has more than 300 properties on the market, the majority of those being three and four bedroom houses.

Ms Calnan said a lack of rental options meant many people were simply priced out of the market.

"The middle of last year, we saw a large portion of short-term accommodations being transferred and we did see an increase in vacancy rates in towns and cities, but as COVID developed, we saw a lot more activity in regional Victoria.

"There definitely seems to be a pattern available of fewer rental properties in regional towns. They were always tightly held.

"Long-term if the trend continues, there is going to be a need of further housing developments in regional towns."

Councillor Moloney said Ballarat needed to look at opening up more living opportunities.

"Ballarat is a market of three and four-bedroom houses but we don't have much supply of one and two-bedroom apartments and houses," he said.

"It makes it challenging for single parents, singles, childless couples. Right now it's a market of large houses. We need to improve our mix of houses of one and two bedroom offerings, which will be attractive to a Melbourne market.

"Right now 25 per cent of Ballarat people rent according to ABS, for those to get our of the rental market to get out of the market into home ownership is very hard.

"If you're selling a house and buying another house, it's a nil-all draw but from the rental market to a home owner market is very difficult and it is especially hard for young people."

Ms Calnan said she predicts that all of regional Victoria will outstrip Melbourne's growth within two years. "Land is always at a premium," she said.

"Let me take Wodonga as an example - I think it was back in June; 50 blocks of land were put on the market and 48 were sold within hours. Ultimately that sort of demand will drive up prices.

"Land will certainly be an attraction for first home buyers, if they are looking to take on the 50 per cent stamp duty rebate, councils will need to think of future planning as they haven't seen this influx coming into regional areas before. It's unprecedented. It's not reliant on jobs, now suddenly it's about lifestyle.

"We now have 14 local government areas which have climbed over 30 per cent in five years."

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