A mix of the effects of the COVID pandemic including low interest rates, increase in government housing stimulation policies and an increased in demand for regional property has seen the Ararat housing market skyrocket.

And for Ray White Ararat director Adam Walker, who has worked within the industry and in Ararat for almost 20 years, he said he has witnessed a complete turnaround in the market over the last two years.

"The market has completely changed and it is just a huge change, but a great change for the market to see some real growth for owners," he said.

"For the last 10 years, since the prison expansion, it has been a strong rental market, but not a lot of growth with, one to two per cent, per year on average.

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"Now there has been huge demand and it is strange to say, in the middle of a pandemic, how busy it has become.

"In most of my career we have lots of properties for people to buy, but it has flipped on its head."

Mr Walker said one of the main challenges for real estate agents in this climate involves making sure all participants are given a fair go at accessing the property they want or need.

"The challenge is trying to give everyone a fair chance at being able to rent or buy a property and that is our strategy," he said.

"The biggest thing for people looking to build is that there is a 12-24 month build wait.

"That is a challenge in itself and that is putting pressure on the second hand house market because people want to get into something now."

Mr Walker said it was good to see housing developments taking place in Ararat around Evans Park, Green Hill Lake and Amaroo Court.

But he said even with the new developments he expected the Ararat property market to remain strong.

"I am starting to think this is the new market locally," he said.

"Interest rates changing could have an affect but that could be a few years away.

"I think it is the new normal here, but who knows because it is a strange market.

"It is great to see the town going along really well and it is great to see the area kicking along."

New data released by Master Builders Victoria showed that in September there was a rise in new home building approvals as homebuyers move towards detached housing.

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A total of 5,705 new homes were approved across Victoria in the three months to September 2021, an increase of 16 per cent at the same time in 2020.

The monthly percentage increase of building approvals in Victoria was below the national average of 22 per cent as activity continues to retreat following the closure of the HomeBuilder grant initiative.

Victoria recorded a 19 per cent increase in the number of building approvals for new detached houses in the three months to September 2021.

The average value of building approvals for new detached houses in Victoria during the three months to September 2021 was $379,559.

Master Builders Victoria chief executive Rebecca Casson said the rate of new homes being built in the state was decreasing since the HomeBuilder grant initiative closed.

"Approvals for both detached houses and medium-high-density homes rose in Victoria in the three months to September 2021," Ms Casson said.

"However, growth for detached houses (19 per cent) was stronger than for new medium and high-density homes (10 per cent).

"While a total of 5,705 new homes were approved across Victoria in the three months to September 2021 - this is down on the 7,689-peak recorded in March 2021, which was the last month that the HomeBuilder grant initiative was open.

"This represents a 25.8 per cent reduction since then."

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