The rental vacancy rate has dropped from 0.7 per cent in May to 0.5 per cent in June.

Mr Marchingo said despite developments in Kangaroo Flat, White Hills and Flora Hill the rental vacancy rate continued to be appalling.

“It’s been appalling for a long time and it doesn’t seem to change,” he said.

Mr Marchingo said he was waiting to see what the state government would reveal with its housing policy.

“It has been imminent for quite some time,” he said.

“We are waiting to see what the state government has in its back pocket.”

The fall puts Bendigo below Ballarat at 0.8 per cent and Geelong at 2.4 per cent.

Mr Marchingo said he was still optimistic that Bendigo’s housing shortage could be solved.

“We don’t have an economy that is going backwards, I’m always optimistic,” he said.

“We have plenty of jobs but no houses. We can always build houses but we can’t build jobs.

“Bendigo is a growing city with rising rents.

“Competition for rentals is beyond healthy.

“It is generally very difficult to break into the rental market and it’s

impossible for those people that are poor.”

Real Estate Institute of

Victoria spokesman Robert

Larocca said yesterday that Bendigo continued to have the lowest clearance rate in

Victoria and was showing no signs of improving.

“In some respects though, Bendigo is not alone with the rest of regional Victoria,” he said.

The drop comes as the

median house price for Greater Bendigo rose by 4.5 per cent to $287,000 in March.