Warrnambool ranked as one of the least affordable cities for rentals

The Suburbtrends Rental Pain Index for September ranks Warrnambool south as number two - making the suburb the second least affordable in the state - behind Wheelers Hill.

Suburbtrends director Kent Lardner said it was not the first time Warrnambool had appeared in the index.

"Warrnambool showed up last time for the wrong reasons and it's showing up again," Mr Lardner said.

Warrnambool is split into two statistical area suburbs - Warrnambool south and Warrnambool north.

The index shows the average cost of rent increased by 8 per cent in the past 12 months in Warrnambool south and the vacancy rate was 0.82 per cent

It also shows most households in Warrnambool south are paying 31 per cent of their income towards rent.

Mr Lardner said it was surprising a number of regional areas had appeared in the list in Victoria.

He said the state government had failed Victorians by heeding warnings over the years about a looming housing shortage.

"I would argue that there is only one solution to save our country," Mr Lardner said.

"The state governments need to be the biggest landlords that we have."

Mr Lardner said there was a desperate need for tens of thousands of social housing properties to be built right across Victoria.

Brian O'Halloran and Co director Brian Hancock said he knew there was a housing shortage coming several years ago.

He said more investors were deciding to exit the market due to the rising costs associated with rental properties.

"I've just sold two units that were long-term rentals," Mr Hancock said.

"It's a major loss and with the loss of motels we've had, you can see Warrnambool is going to be in trouble when it comes to accommodation for major events."

Mr Hancock said he only had one rental listed at the moment.

He said it hadn't been uncommon to have only one or two rentals available in the past 12 months.

When a property is listed, Mr Hancock said there were usually between 25 and 35 applications submitted by people desperate for a rental.

Mr Hancock said a lack of rentals had driven up the prices.

"I would say it's probably been the biggest rental increase I've seen in years," he said.

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