MELBOURNE has sprawled 50 per cent further than its official urban growth boundary and is overrunning small country towns, residents' groups and planning experts say.
Developers are building large suburban-style estates as close as three kilometres to the boundary, marketing to metropolitan commuters while avoiding the infrastructure levy.
Meanwhile, thousands of housing blocks in regional towns are being sold as an alternative to the city's high land prices, from Drouin in Gippsland to Wallan on the Northern Highway and Bacchus Marsh in the west. It is a span of more than 150 kilometres from east to west, a distance further than that from the CBD to Bendigo.
The Bass Coast Shire Council this month approved a 1225-lot development called Waterford Rise in Warragul, which real estate agency Oliver Hume described as a ''virtual growth area outside of Melbourne's urban growth boundary''.
The agency expects at least half the lots will be sold to Melbourne buyers keen to ''jump the boundary'', many of whom will commute back into suburbs such as Berwick and Dandenong for work.
There are currently 15 estates under way in the shire, with development in places such as Drouin and Trafalgar expected to double the size of the once-rural towns.
They include the 500-lot Jackson's View estate in Drouin that is 40 kilometres outside the boundary and is being marketed as ''a hassle-free commute to Melbourne''.
''It's a trend that is definitely growing as the UGB [urban growth boundary] comes closer to regional centres,'' project director Gerrard Ellis said.
About 21 per cent of Drouin's current resident workers already travel to Melbourne for work, a recent Planning Department report found.
In Wallan, now just three kilometres outside the boundary that was extended in July, there are four new housing estates with plans for more than 5000 new homes in total. The developments are set to more than double the population of the town.
They include the 900-lot Spring Ridge and up to 3000-lot Wallara Waters, which are just ''a 45-minute train trip from the Melbourne CBD'', according to the developers.
Buyers are also leapfrogging the boundary in Moorabool Shire, where developer Devine is building a 1500-lot estate near Bacchus Marsh. It is about 10 kilometres from the extended boundary at Melton.
The shire's chief executive officer, Rob Croxford, said the council was approving 100 new housing lots on average at its fortnightly meetings.
''Bacchus Marsh is outside the urban growth corridor, but I think there is an increasing recognition that in time we need to consider the outskirts of Moorabool as part of the urban fringe,'' he said.
Macedon Ranges Residents Association secretary Christine Pruneau said such estates represented an uncontrolled expansion of Melbourne that made a mockery of the boundary.
''Every small town near the boundary is really being hammered,'' she said.
''These are little towns getting development that looks like it belongs in Essendon and it's changing the character of the places into suburbs of Melbourne.''
The association has been campaigning against what it says will be the 1000-lot Braemar Estate development at Woodend, a town with a population of 3700.
Ms Pruneau said some shire councils were resisting unsuitable developments while others believed any growth was progress and were courting developers in order to collect more rates.
The Macedon Ranges Shire Council is seeking community feedback on its settlement strategy, which recommends dramatic increases in population for Gisborne and Riddells Creek, towns less than 10 kilometres beyond the extended boundary at Sunbury.
ABS data released in March showed the fastest-growing local government areas in Victoria were overwhelmingly located just inside or outside the boundary of metropolitan Melbourne.
A spokeswoman for Planning Minister Justin Madden said the government had designated four main regional growth corridors, including Warragul/Drouin and Kilmore/Wallan.
''We would expect to see regional centres like Warragul, Drouin and Wallan planning for growth in their regions while maintaining their distinctive characteristics,'' she said.
''Clearly designated growth areas are essential to protect the character of smaller towns and prevent urban creep.''
She said the $631 million regional blueprint ''Ready for Tomorrow'' included $37 million to help regional councils plan for population and jobs growth.
RMIT associate professor of planning Michael Buxton said the state government's stated aim of decentralising population growth into the regions was a good idea. But it should be concentrated away from the boundary in bigger regional centres such as Wangaratta and Ballarat, where there were jobs and infrastructure to accommodate more people.
''Huge numbers of people travelling even bigger distances to the city to work isn't going to solve anything,'' he said.
Professor Buxton said housing was a threat to some of Victoria's most productive agricultural land around Warragul and Drouin.
Baw Baw Shire mayor Adam Tyson said a house-and-land package in the shire was $30,000 cheaper than in Pakenham, a nearby suburb that is inside the boundary.
''We are not that far out, we are on the rail line,'' he said. ''We are resisting growth in the farming areas but not around the towns because we have infrastructure that can cope. It's not a huge worry that we are becoming a commuter shire.''
He said many residents were concerned about losing the rural feel of the shire and the council had been consulting them about growth.
The chief of the Urban Development Institute of Australia, Tony De Domenico, said such growth benefited towns through improved services, infrastructure and economies.
''Perhaps this trend reflects that there shouldn't be any boundary at all because you've got to allow people to live where they wish,'' Mr De Domenico said. ''If you try to limit the market it never works, there is always a way around.''
First home owners who build in a regional area receive $26,500 in government grants compared with $20,000 for a new home inside the boundary. Developers in regional areas do not pay the controversial growth areas infrastructure contribution of $95,000 a hectare.
