The Mallee, Gippsland and northern Victoria were among the most popular regional locations for people to buy property in 2021, fresh real estate data shows.
Mildura, Traralgon, Shepparton and Warrnambool recorded the most sales in the first three quarters of 2021 as median regional property prices jumped on average by 20-30 per cent.
Real Estate Institute of Victoria president Adam Docking said the phenomenal results for regional Victorian property prices highlighted a strong desire for people to leave the big smoke and set up life in the country.
"People have effectively discovered that regional Victoria is an inspirational place to live," he said.
"One of the positives of COVID is that people have realised that they don't need to be near the city or be city-bound for work."
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Mildura topped the list for a second consecutive year for the number of sales with 1007 properties sold in the first nine months of 2021 at an average median property price of $367,000.
Traralgon came in second with 942 sales and a median property price of $399,250, while Shepparton was third with 783 sales and a median price of $400,500.
Mr Docking said property price increases were partially driven due to the pandemic, and people looking for more space amid a series of lockdowns.
"People have realised that living in a regional area comes with a magnificent lifestyle," he said.
"This is a good thing for regional areas because as people re-discover these towns, more money is going into those areas and that means the government will start building infrastructure and creating more jobs."
Among the biggest property increases in the last 12 months, Daylesford topped the list with a 38.6 per cent rise in the median property price from $667,500 in 2020, to $925,000 in 2021.
Point Lonsdale followed close by with a 38.1pc increase with a median price tag of $1.15 million.
Farming communities such as Stawell also made the top 10 for increases to the median house price with a 32.7pc rise from $199,000 in 2020 to $264,000 this year.
Horsham experienced a similar rise of 32.4pc, up to $299,250 from $226,000 in 2020.
Wangaratta's median property value rose 26.6pc to $436,650, Ballarat East rose 24pc to $477,500, Wonthaggi rose 28.8pc to $483.000 and Strathdale rose 24.5pc to $660,000.
Only two Victorian towns had a decrease in the median property price, including Soldiers Hill, a suburb of Ballarat, which declined 7pc from $525,000 in 2020 to $488,750 in 2021, and Kyabram which slipped 2.8pc from $307,500 to $298,750.
Mr Docking said he was surprised by the increases in towns outside the major regional centres which included Geelong, Ballarat and Bendigo.
"We're expecting the price growth to stablise so we won't continue to see record prices as such," he said.
"People shouldn't be scared to change or enhance their lifestyle by moving to the region because prices will remain steady.
"Greater Melbourne prices have also increased and people now realise you can afford to move to the regions after securing a good price for your suburban property."
Several Gippsland towns also made the list including Morwell where the median house price rose 29pc from $205,000 to $265,000 between 2020 and 2021.