The state government will double the first home owners grant for regional Victoria in a bid to draw more young buyers into the regions and counter the capital's housing affordability crisis.

First home buyers building new homes in regional Victoria will be entitled to $20,000 as of July 1 this year, up from $10,000 for new homes valued up to $750,000.

New house and land packages are on the way for Melbourne's fringes, but that's likely to increases prices. Photo: Erin Jonasson

Treasurer Tim Pallas said he expected the new grant would increase buyer interest in regional cities like Ballarat and promote decentralisation by drawing young people out of the state's congested capital.

The government expects the grant to assist up to 6000 Victorian first home buyers.

"Decentralisation is a vital part of our agenda. You can't decentralise unless you provide people with housing opportunities and you make housing affordable, as a package of initiatives this is far and away in excess of what any other state has done," Mr Pallas told the Ballarat Courier.

"These are specific initiatives targeted at regional Victoria because we do think it's a vote of confidence that regional Victoria is an attractive place to live."

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Source: www.theage.com.au