Bendigo has had one of the country's best increases in regional housing values over the past 12 months.
Data from property data company CoreLogic shows the Bendigo region's housing values had a rise of 2.8 per cent in the past 12 months including a 1.4 per cent increase in the December quarter of 2019.
The region was seventh in the country for regional growth behind west and north west Tasmania (5.9 per cent), south east Tasmania (5.3 per cent), Warrnambool and south-west Victoria (4.5 per cent), Launceston and north east Tasmania (4.1 per cent), Mackay-Whitsunday (2.9 per cent) and Cairns (2.9 per cent).
CoreLogic head of research Ken Lawless said it was good news for property owners but also made some housing unaffordable.
"It means home owners in Bendigo are getting wealthier but the flipside is more housing may become unaffordable," he said.
"Housing prices in Bendigo relative to Melbourne are quite low and that factor is helping drive (regional) growth.
"So people look to major regional markets like Geelong and Ballarat but Bendigo is also seeing some benefit from an increased level of demand."
Mr Lawless said Bendigo's level of growth was sustainable.
"The market has gone through some what of a slow down - 2.9 per cent isn't shooting the lights out - but values rose by 1.4 per cent over the quarter and we are seeing some momentum and it's relatively sustable growth," he said.
"Melbourne values are up six per cent over the December quarter, and are still leading the pace of capital gains by some margin but it means affordability is worse in those markets.
"Things like the local economy, whether there are job opportunities or not and lifestyle factors also play into (the rate of growth)."
CoreLogic breaks the Bendigo area down into three sub-categories - Bendigo, Castlmeaine-Heathcote-Kennington and Loddon-Elmore.
Mr Lawless said Bendigo sub-category was responsible for the growth in the region with a rise of 3.4 per cent in the past year. Castlmeaine-Heathcote-Kennington recorded a decline of 0.8 per cent in the same time while Loddon-Elmore values dropped 2.3 per cent.
"(Growth close to the city) makes sense if that's where all facilities would be," Mr Lawless said. "If properties are some distance out of a major service area, they tend to be larger and further from necessary facilities."
Away from Bendigo the Campaspe area saw values decrease by 3.8 per cent in the past 12 months while the Maryborough-Pyranees area was up 1.5 per cent for the year following a rise of 5.3 per cent in the December quarter.
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