That is well below normal pre-COVID levels where there would be between high-200s and 400 properties for sale at any one time, Ray White real estate agent Jason Thwaites said.

Despite the traditional spring selling season about to kick-off, the tightly held market was amplified by the "stop-start" lockdowns but Mr Thwaites said that was not the main driver of the low numbers.

"The regional centres haven't seen the unprecedented amount of people that want to leave the metropolitan areas," he said.

Mr Thwaites said there didn't need to be many people choosing to leave Melbourne to make a big difference in a regional market.

The shortage of housing stock is another factor in driving prices higher, with property prices in Warrnambool and the south-west rising another one per cent in August.

The latest CoreLogic data shows property in the region had hit a median of $436,295 - a 22.9 per cent jump over the past 12 months, the highest in regional Victoria.

The Geelong region had the next highest growth rate in regional Victoria with a 22.6 per cent increase.

The only region with a higher growth rate in the state was the Mornington Peninsula where homes rose 28.3 per cent.

Despite the low number of listings in Warrnambool, there were several properties they were waiting to launch into the marketplace when the uncertainty of see-sawing lockdowns ended.

Mr Thwaites said while the city's real estate market had a small correction in 2000, it levelled out post Global Financial Crisis until about 18 months ago.

He said in 2000, first-home buyers were getting $7000 grants at a time when you could buy a house for $90,000. "So it was a big incentive for people to get into the market at that time and the market probably moved 20 per cent year on year for two years in that point of time, but that was off a really low base," he said.

Mr Thwaites said the market had levelled out after 2009 until recently. "Truth be known it really kicked in around October last year after the first major lockdown," he said. Mr Thwaites said that in 2000, people were able to buy and sell a lot easier, and there was more land available.

"Now it's up to two years before you can get your block and potentially another 18 months before your house is built," he said.

While there were investors entering the Warrnambool market, he said there were those selling out which was exacerbating the problems with shortages in the rental market.

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