There are regulations which currently restrict people building on rural land under 100 acres but agents are calling for a re-think.

A property search revealed the highly sought-after blocks are in extremely short supply.

Roberts One Real Estate principal Daniel Roberts said there was enormous demand for smaller building blocks in Moyne Shire but none available.

He first floated the idea of farmers being able to slice off five acre blocks a couple of years ago during a sharp downturn in the agriculture sector.

"Try and find a block of land ready to build on out of town (Warrnambool)," he said.

"The small subdivision at Mailors Flat sold in two seconds but there are simply no blocks ready to go, ready to build on. Surely that tells you something - it's a massive problem."

Moyne Shire chief executive officer Bill Millard said rural housing land had generally reflected demand in the Moyne Shire over the past few years.

"Like many housing sectors, rural housing and lifestyle lots are particularly desirable at the moment," he said.

"Moyne Shire has pockets of land suitable for lifestyle living across its rural localities including Mailors Flat, Cudgee, Mortlake and Port Fairy.

"Council is finalising its Rural Housing Strategy which will cater for additional rural housing land. In the coming months, the new council will be briefed on the strategy and final work provided for consultation."

Mr Roberts said he was involved in a subdivision at Winslow, which had faced countless hurdles to get on the market.

"It's absurd," he said.

"What the Moyne Shire required just to get a road was simply amazing."

Mr Roberts said he had been told there were two five-acre titles at Lake View Road near Koroit that would not be allowed to be built on because they were under 100 acres.

"There needs to be a complete mind set change in terms of planning," he said.

"Currently if a block is under 100 acres you can't build on it. Surely if land has already been separated that should be treated differently.

"There needs to be exemptions if land has already been titled separately."

Mr Roberts said further building development on lifestyle blocks would provide additional revenue for the shire and help grow country communities.

"I've been very critical for a long time but what about growing those communities like Nullawarre, Panmure and Hawkesdale where you have shops, a restaurant or a pub and schools," he said.

"There's simply no chance of future development because there are no building blocks.

"Imagine the potential if lifestyle blocks were offered in those communities. They would take off and thrive.

"Surely that's in everyone's best interest.

"I just don't get it. Why not let country towns grow?

"Moyne Shire has an enormous opportunity to be different."

The agent said there had been subdivisions in the Geelong district - at Mount Moriac and Winchelsea - which had led to booming communities.

"It's time to look outside the square," he said.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can access our trusted content:

Have you signed up to The Standard's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in the south-west.