Bendigo real estate agents say there are not enough rental properties available in the region to meet the growing market demand.
It comes as the latest data from the Australian Bureau of Statistics showed 29.4 per cent of Victorians were renting in 2017-18, up from only 21.8 per cent in 1994-95 and 27.7 per cent in 2015-16.
"Bendigo has had relatively stable growth, with a lot of people relocating from Melbourne for the cheaper and more affordable lifestyle," PRDnationwide Real Estate Bendigo director Tom Isaacs said.
"But there are a lot of people in the market compared to the number of properties available. There is less land being leased for construction so there are just less properties being built."
Only 68 per cent of Victorian households owned their own home last year, according to ABS data, compared to more than 75 per cent of people in the state 25 years ago.
C.R. Martin Real Estate owner Clive Martin said properties were harder to come by in the Bendigo region for those who were either looking to rent or purchase their first home.
"There is nothing out there for anyone because there are a lack of houses coming onto the market," Mr Martin said. "It's like a dog chasing its tail.
"People are afraid to sell because they don't believe they will get the price they want and, as a result, there are no houses for people to buy.
"Then there isn't anybody rushing out to build anything because we've seen a downturn in the market in the past 18 months. No one is confident."
But Bendigo Real Estate principal Nekti Tzouroutis said many are still turning to places like Bendigo and the surrounding towns because property prices in Melbourne are so unaffordable.
"We have noticed that we've had more enquiries and quality conversations from people who are from out of town," Mr Tzouroutis said. "Regional centres like Geelong and Ballarat have already hit a certain peak in the market.
"So people are looking to other areas where there is good infrastructure and businesses already in place. Bendigo is one of those places."
There was also an upside coming with the market expected to improve during the remainder of the year, PRDnationwide Real Estate Bendigo director Tom Isaacs said.
"We think you'll see the market strengthen over the next six months," Mr Isaacs said. "The market is currently reasonably strong, even though we're in the depth of winter.
"We tend to have a dramatic increase over the spring and summer months."
But while the number of tenants in Victoria continues to increase, Mr Tzouroutis said the housing market was not as unattainable as many renters may have thought.
"The best advice I can give to people is to look at their income and what they're earning," he said. "The affordability of a loan is actually very cheap at the moment.
"Historically, the lending capacity was at a limit but that is changing with interest rates being so low.
"So if someone is spending $350 per week on a rental property, if they can save up enough of a deposit, they might be able to afford a loan and even pay less than they were when they were renting.
"Tenants looking to buy their own home should go to a financial institution, go to a local mortgage broker or even come to us as agents because we'd be happy to help."
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