More first home owner grant recipients are also choosing new homes and a lifestyle near the coast in the Geelong growth areas of Armstrong Creek and Charlemont, than new homes in Pakenham and Officer in Melbourne's outer south-eastern growth corridor.

The popularity of the fast-growing Geelong suburbs, in postcode 3217, are confirmed by State Revenue Office figures showing where new home buyers who apply for the $10,000 first home owner grant are buying.

Applications for the grant in the fast-growing Geelong suburbs for the first six months of this financial year, at 134, put postcode 3217 in the top 10 postcode areas across the state, ahead of a number of metropolitan Melbourne growth suburbs.

Meanwhile, figures for the 2015-16 financial year show that the postcode was home to double the number of first home grant applications (201), than the second top regional postcode for the grants, the Geelong postcode of 3216 (home to Grovedale and Waurn Ponds).

In 2015-16 the Bendigo postcode 3551 (including Epsom and Huntly) just pipped Ballarat's postcode 3350 (which includes Alfredton) for grant applications, finishing in third and fourth position respectively, among regional postcodes.

Collectively, first home buyers in the top 10 regional postcodes received about $9 million in first home owner grants in 2015-16. Statewide, first home buyers received almost $400 million over the past three financial years in grants and bonuses to help them gain entry to Victoria's booming property market.

Demand for new homes in regional Victoria could soon be on the rise, after the Victorian government recently revealed it would double the first home owner grant to $20,000 for new homes built in regional Victoria. The higher grant applies to contracts signed between July 1 this year and June 30, 2020.

The government also announced it would abolish stamp duty for first home buyers on properties up to $600,000, on contracts signed from 1 July this year.

The surging population of Geelong's developing suburbs helps explain why the population of Victoria's second biggest city is rising rapidly.

According to Peter Bettess, director of planning and development at the City of Greater Geelong, the municipality had an estimated population in June 2016 of about 235,000.

In recent years Geelong's population has grown at a rising rate each year. In 2011-12 the city grew by 1.1 per cent, but by 2015-16 the growth rate had climbed to 2.4 per cent, he said.

"If you're looking at a population of around 235,000, and at a 2.4 per cent growth rate, you're talking about 5500 people a year coming into Geelong," he said.

Regional Victoria was "experiencing a renaissance", said regional development minister Jaala Pulford.

"New housing areas in our regional cities and towns are attractive places to live and provide a wonderful lifestyle – we're building new schools, improving the train services, cutting payroll tax and peak hour only lasts a few minutes," she said.

"The grant is an important boost for people entering the market for the first time and for the housing construction industry across regional Victoria."

Mark Whinfield, general manager of the Warralily development in Armstrong Creek, estimated about 35 per cent of purchasers in Warralily were first home buyers. About 30 per cent of all buyers were from outside Geelong.

Land prices in the development started from $152,000 and people could buy a four-bedroom house and land for under $400,000, he said.

"Warralily is 10 minutes to the centre of Geelong, or 10 minutes to the Surf Coast. So it's a great location," he said.