The median house price in regional Victoria has recorded its largest annual increase since 2001, outstripping growth in Melbourne.
According to data from Real Estate Institute of Victoria, the median house price in regional Victoria grew 27.0 per cent in 2021, reaching a record-breaking $565,000.
Units and apartments in regional Victoria also grew, achieving an annual growth of 19.6pc, bringing the median price to $395,950.
Among the towns with the biggest surges in house prices in 2021 were Horsham at 54.1pc, Yarrawonga 40.3pc, and Ararat and Wonthaggi both recorded 36.7pc increases.
REIV President Adam Docking said the ballooning prices reflected the attraction of regional Victoria as a lifestyle choice following two years of COVID-19 restrictions.
Surpassing a median house price of $1,125,000 in the December quarter, metropolitan Melbourne maintained a steady growth with a quarterly increase of 4.2pc and 18.9pc annually - the highest annual growth in over a decade.
The data shows houses in middle Melbourne, the typical suburban family belt, achieved a $1,230,000 median price with a reported annual increase of 18.3pc.
Houses in outer Melbourne have experienced price growth for six consecutive quarters and with a median price of $815,000 are now 16.4pc more valuable than 12 months ago.
Transactions grew too, with the number of homes that went under the hammer surging 144pc compared to 2020.
There was no letting up, either, with 15,954 auctions and 12,794 sales in the December quarter, making it the strongest ever performance for both auction volume and sales in any quarter.
Even so, Mr Docking said he expected the market would soon begin to stabilise as some of the listing volume issues are addressed and buyers have more to choose from.
The impact, if any, of the Omicron surge on the real estate market was yet to be fully understood.
"At this stage it's too early to tell. Virus safety is front-of-mind and Victorians are well adjusted to the protocols they need to prepare for when attending inspections," Mr Docking said.
"Major factors influencing the residential real estate market continue to be low interest rates, lifestyle choices as more people work from home and pent-up demand after the series of lockdowns over 2020 and 2021."
Mr Docking emphasized the need for government to improve infrastructure investment to support this unprecedented growth in the regions.