BENDIGO rental prices have spiked nearly $20 in one month, partly because landlord are confused about incoming tenancy laws, a peak real estate group says.
A housing shortage is forcing renters to pay a "premium" across regional Victoria, Real Estate Institute of Victoria president Leah Calnan said.
"There is an urgent need for more rental accommodation across Victoria." she said.
"Healthy vacancy rates should be around 4 per cent; most of the state is sitting at 1 or 2 per cent, increasing demand has led to rental price climbing."
Bendigo renters are paying an estimated $340 a week on average for houses, compared to $320 at the same time last year, REIV figures show. They were paying $17 less a month ago.
Some REIV members across the state are concerned rentals are being sold or kept off the market, Ms Calnan said.
"With changes to the Residential Tenancy Act coming in next year, landlords remain confused and cautious about losing control over their investment," she said.
A government spokesperson said there was no evidence the reforms have resulted in fewer properties becoming available.
The wide-ranging laws are set to take full effect in mid-2020 and will include minimum standards for heating, working locks, appliances nearing the end of their life and disclosures between tenants and landlords, among other changes.
"With competition for housing at a high, many families are struggling to put a roof over their heads, which puts a lot of pressure on local welfare groups," Ms Calnan said.
"The state government needs to do more to work with landlords and encourage them to rent out their investment homes."
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However, real estate agent Tom Isaacs said incoming laws were not influencing Bendigo rental shortages.
"I think there has been some hysteria about the laws, but I think they are generally good for the vendor and the tenant," the PRDnationwide Bendigo director said.
"The reality in Bendigo is that we have had a lack of construction of new dwellings, or permits issued, over the course of the last two or three years.
"We've also had a growing population."
Residential building approvals have not reached highs seen earlier this decade, when more than 1000 were given the tick every year in the City of Greater Bendigo.
Approvals dropped to a decade low of 719 in the 2016/17 financial year. That was nearly half of what was seen in 2011/12, according to the Australian Bureau of Statistics.
They have steadily risen over the last two financial years and Mr Issacs anticipates more gains in the next 18 months.
Bendigo needs 900 new homes, units and apartments every year until 2036, according to a 2016 ABS forecast.
"New rental homes are being leased out in record time, therefore more owners should be encouraged to put their property on the rental market," Ms Calnan said.
Consumer Affairs Victoria is currently doing public consultations on the Residential Tenancies Act. To give feedback on proposed changes visit engage.vic.gov.au/rentingregulations.