The top growth hotspots in regional Victoria have been highlighted in a new report.
The analysis, by the Real Estate Institute of Victoria (REIV), found large service centres within driving distance of Melbourne experienced the most movement in prices.
Drouin, 90 kilometres west of Melbourne, grew by seven per cent in the first quarter of 2014, REIV data shows.
The town became more popular as Melbourne's suburbs expanded eastwards.
“Once virtually a village – it had just 700 people in the early 1900s – its population is more than 13,000,” the report states.
On the other side of the city, the towns of Lara and Ocean Grove grew by 5.6 per cent and 5.1 per cent respectively.
“Ocean Grove is just one of the seaside and regional towns increasingly popular with those wanting space and beach – or in the case of Drouin, bush surroundings after work,” the report states.
Further inland, several towns recorded impressive first quarter results.
Four-bedroom homes in Traralgon grew by 4.9 per cent, while three-bedroom homes in Sale grew by 4.8 per cent.
In nearby Morwell, which benefits from a train service to Melbourne, prices grew by 15.5 per cent over the quarter.
Several towns far from Melbourne also achieved high capital growth.
Benalla’s median price for three-bedroom homes increased by 14.4 per cent in the period, while Warrnambool’s median for four-bedroom homes rose by 15.2 per cent.
“As these figures show, it is not only in Melbourne where demand has driven house price growth,” the report states.
“Properties in regional Victoria can be an excellent investment, particularly in service centres and in areas sought by those willing to commute for a foot on the property ladder.”