Australia's regional centres are performing as well, or in some cases better, than their capital city cousins. We look at why homebuyers are fleeing the major metropolitan markets and what is happening in the regions.

Regional towns around Australia are undergoing a residential renaissance as urban growth boundaries and geographical limits increase population densities in capital cities.

According to property analyst Macroplan director, Brian Haratsis, the period between 1950 and 2000 was about creating the world's most liveable cities in Australia. During this time, Mr Haratsis said, almost all of the urban growth followed existing rail and arterial roads.

He said the natural progression of urban growth was de-urbanisation, which would see increasing numbers of people choosing to live on the city fringe, in regional centres or in nearby coastal areas.

Victoria makes it happen

Some of the strongest rates of de-urbanisation are found in Victoria where the government's Make It Happen In Provincial Victoria campaign aims to increase the population of regional Victoria by 1.25 per cent by next year.

According to a spokesman for the Department of Industry, Innovation and Regional Development the campaign is encouraging Melburnians to either live, work or invest outside the state's capital.

"It is designed to make people aware that in provincial Victoria there are those opportunities. It is to make people aware that there are better lifestyle options and that there is work."

Mt Alexander Shire is home to the popular getaway towns of Daylesford, Castlemaine and Maldon. The shire's acting chief executive officer, Sandra Wilson, says city refugees were seeking a sense of community from their lifestyle change.

"Lifestyle more than anything is attracting them," Ms Wilson says. "They are looking for towns that have a heart and soul and it is people, along with the built environment, that gives them that.

Regional Victoria's price movements are generally positive, benefiting from the flow-on effects of the boom period and the government's push for regional investment.

Bendigo's median house price rose 3.1 per cent to $223,750 over the September quarter, Geelong's increased 0.2 per cent to $270,000 and Ballarat's fell 4.3 per cent to $202,000.

Queensland attracts sun-shifters

Investors are still buying heavily in regional centres, partly because of their affordability in comparison to their south-east Queensland counterparts.The Caloundra Shire median house price increased 1.6 per cent to $383,500 in the June quarter. Maroochy Shire recorded a slight decline of 0.3 per cent down to $375,000 and Noosa Shire remained the same at $420,000.

West hots up

Western Australia's hottest markets outside of the Perth metropolitan area in the June quarter include Albany (a median price $255,000 and 34 per cent annual growth), Augusta/Margaret River (median price $366,500 and 32 per cent annual growth) and Port Hedland (median price $287,500 and 54 per cent annual growth).The largest increase in median house prices in the June quarter occurred in Bunbury, which rose 9.7 per cent to $260,000. The annual growth rate for Bunbury was 39.8 per cent.

Strong growth in SA

According to the Real Estate Institute of South Australia, prices in country areas have risen by 5.3 per cent over the past 12 months and 1.1 per cent over the September quarter. The median price is now $176,950.

Mr Turner said towns around the Iron Triangle were the strongest performers over the past 12 months with Whyalla achieving a 19.7 per cent increase in its median house price, moving it to $172,500; Port Pirie rising by 36.1 per cent to $129,350 and Port Augusta increasing by 26.2 per cent to $125,000.