The booming housing economy in Ballarat, which until recently showed little signs of abating, has left local residents feeling dejected and fearing that they will be pushed out of the market long term.

Clara Orr, who is currently living at home with her parents in Lake Wendouree, has been searching for her first house for over seven months and has become increasingly frustrated by the process.

"It's really hard," Ms Orr said.

"They tell you to try and get your foot in the door, but it's just so expensive at the moment," she said.

"At this stage, I feel like I'll be living at home forever."

Ms Orr said she would prefer to stay close to central Ballarat for work but sensed the chances she would land the perfect place within her budget was slim.

"There's not too much up for sale at the moment either," she said.

"I am fully aware that with everything that's happening with COVID and Melbourne lockdowns that a lot more people are moving out to regional Victoria, so I'm sure that has a lot to do with it.

"But [vendors] also seem to be asking a massive price for houses that are going to need to be renovated or are just not in the best condition."

While the house hunt has dragged on for longer than Ms Orr anticipated, she said she was grateful that her circumstances allowed her to wait out the market a bit longer.

"I'm still actively looking, but I'm fortunate that I'm not in a position where I have to move out right now.

"I feel sorry for the people that have no choice but to have to buy right now, because it's so expensive."

Winter Valley resident Travis McCarthy has been looking for his first home, with plans to start a family, for over a year.

Originally from Warrnambool and having lived in Melbourne for an extended period, he and his partner Sophie became "disillusioned" by the city life after they found it too difficult to find a place that suited their needs.

However, Mr McCarthy has found himself in the same predicament with the move up to Ballarat.

"It seemed like the timing was just all wrong. We got over here and the market's just lifted," Mr McCarthy said.

"Everything's selling for above the asking reserve by quite a lot, sometimes 30-40,000 more," he said.

"We went to houses over the weekend and there was, at the very minimum, at least 15 to 20 people at each house."

"With all this demand, it's made for a very soul crushing experience trying to buy a house right now."

Jellis Craig real estate agent Matt Wiltshire said the current market boom has seen a mixture of buyers including locals and people coming from cities and regional towns.

"It's not just Melbourne [buyers]. There are a lot of farmers coming in and hitting that top end market hard, and then we've got Geelong and the Surf Coast also buying up here."

Mr Wiltshire said most growth had been seen in the low to mid end of the market with outer-Ballarat suburbs including Canadian, Wendouree and Alfredton being the only affordable places for the majority of first home buyers.

Nonetheless, the odds are stacked against potential first-home buyers with the financial restrictions they often encounter with bank loans.

"The first home buyer price point at the moment is also dominated by investors," Mr Wiltshire said.

"What home first time buyers are really struggling with is that all of their offers are subject to finance, and they're competing against the cash offers."

For Mr McCarthy, the "ridiculous" terms other buyers are able to offer has made it a struggle for him to even be competitive for some places.

"It feels like the market is encouraging a move-fast and very haphazard approach to purchasing a property," Mr McCarthy said.

"If you're not offering the full price, the top offer at least, and your terms aren't 30 days [with] no inspections, no pest checks, no nothing, and unconditional, you're not going to get a look in."

Mr McCarthy said he and his partner have had to compromise on their idea of their first home but found the rising prices in outer-suburbs were also worrying.

"We're not looking very central or for anything crazy new or anything," he said.

"We're actually looking for something that's a bit older that we can do a bit of work to, like a 70s or 80s home.

"But we're even getting priced out of that."

In what may be some relief for prospective buyers, CoreLogic's research director Tim Lawless said he was noticing price growth pace in many regional and capital city markets starting to slow.

"The rolling three month change in Ballarat housing values has reduced from 6.6% in March 2021 to 3.4% over the three months ending October," he said.

"Housing values are still rising rapidly, but not quite as rapidly as they were earlier this year."

According to CoreLogic, Ballarat house prices have increased by 19.8 per cent over the past 12 months to October, adding approximately $90,600 to the value of a typical property in the region.

"Although conditions appear to be easing, they are doing so from a position of extreme strength, with the slower pace of growth still substantially above average," Mr Lawless said.

Mr Lawless said the supply market this spring had been "stronger than normal", most likely reflecting a combination of strong selling conditions and a backlog that is now appearing after lockdowns.

"This is still a sellers' market," he said.

"Homes are selling quickly with little in the way of discounting from vendors, however we are now seeing total listing numbers rising.

CoreLogic research revealed that total listings across Ballarat have trended 34 per cent higher since the first week of September, which Mr Lawless said may provide more choice for buyers and potentially help "ease some of the urgency in the market".

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In regard to the rental market, Mr Wiltshire said there has been an inflating demand due to first-home hunters being pushed out of buying.

The Real Estate Institute of Victoria has the Ballarat and the Central Highlands region's vacancy rate currently sitting at 1.7 per cent while the Regional Victorian rate is 1.2 per cent. A healthy market normally has rental rates at around 3 per cent.

CoreLogic's Mr Lawless said average house rents have also been up 7.2 per cent in the twelve months up to the end of October, increasing roughly $42 per week to hit about $394 per week for a typical three-bedroom dwelling.

Mr McCarthy said the rental cost rise was a concern particularly since he has been forced to "sit tight" on purchasing.

"We're fully expecting that if we're still renting [next year], that we'd see probably a $50 increase a week," he said.

"That seems to be from the people I've talked to about where the market's going with rentals."

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