CoreLogic's latest Regional Market Update reveals the median cost of a home in Warrnambool rose by 27.4 per cent. It comes after the median house price was below the $400,000 mark early in 2020.

The median cost of a unit is now $410,191.

CoreLogic research director Tim Lawless said there were strong signs that the work-from-home trend, which had driven migration to the regions from capital cities in the past two years, was likely here to stay.

Warrnambool's Ocean Road Realty agent Rodney Roberts said people were mostly looking for a home with a price range of up to $600,000.

"However, we are now seeing more people increase their price ranges to secure a property," Mr Roberts said.

He said a lot of people were wanting to move to the south-west for a quieter lifestyle.

Mr Roberts said more buyers were willing to buy outside of the city due to the skyrocketing prices.

"We are seeing high demand for properties everywhere," he said.

"The outer lying towns were seen to be a better option as Warrnambool house prices were getting above everyone's price ranges very quickly.

"In the outer lying towns you would get a bigger home and it would be on a bigger block for less money but even that is starting to change as well.

"Koroit now has a lot to offer with the new IGA opening up and also the restaurants and shops in the area."

Allansford, Mortlake and Terang are also proving popular, Mr Roberts said.

He said demand for properties in the south-west was unprecedented.

"I can't remember a market place like this, we have several buyers ready to go and as soon as we list a property we are getting offers almost straight away," Mr Roberts said.

Meanwhile, a PropTrack report reveals 11 per cent of buyers paid more than 10 per cent over the listing price for homes in Warrnambool.

"The low supply of properties for sale has spurred a competitive market, with home buyers being forced to pay up for properties in high demand regions," it states.

In addition to that the number of homes in Mortlake sold has increased by 56 per cent, the report reveals.

Wilsons Real Estate agent Lucas Wilson said properties in the town were proving incredibly popular.

"We've sold 29 properties in Mortlake so far in 2021," Mr Wilson said.

"The median house price in Mortlake would have close to doubled in the last two years."

Mr Wilson said while prices had increased, properties in Mortlake still offered value for money.

"Demand everywhere is strong, but I believe Mortlake has a lot going for it," Mr Wilson said.

"The town itself continues to go from strength to strength and while prices have jumped a lot, it still provides a relatively affordable option for those buyers priced out of the bigger towns and cities.

"They can purchase a home, likely on a large quarter acre block, in an attractive town, with all essential shops and amenities, quality eateries, a P-12 school, aged care, and great people.

"The Livestock Exchange has been a great thing for the town bringing people to Mortlake on a regular basis."

Mr Wilson said he believed more people were wanting to live in regional areas.

"I believe there has been a shift in people's attitudes to lifestyle and working arrangements, obviously through the pandemic, so in this regard I think the regional push will continue," he said.

"While we've seen huge increases in prices in a short time, more so than I've ever seen previously, our district offers many opportunities and for those coming from metropolitan areas, or other coastal towns closer to Melbourne and Geelong, this area still very much offers relative affordability."

One listing Wilsons has at the moment is a grand period home in Mortlake.

Boasting five bedrooms, the character filled home - which has three living areas - offers great value with a listing price of $499,900.

The report shows regional coastal areas are increasingly popular.

"Proximity to the beach, coastline or water are a premium many buyers are willing to pay for," it states.

"With the pandemic forcing more time at home, that privilege has been maintained and prices in regional beach towns have accelerated faster than those inland.

"The trend in tree or sea change relocation has boomed with flexible workplace arrangements and lockdowns attracting more people to a regional lifestyle."

PropTrack Senior Economist and report author, Eleanor Creagh, said price growth in the regions was likely to continue, but moderate from current levels.

"Already the pace of price growth is slowing across the broad market and we expect that to continue with the peak of the current cycle now behind us," she said.

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