More than 20 per cent of households have an income of less than $900 a week, which puts a property costing over $300 a week out of reach, according to the Council to Homeless Persons.

A Search on Domain revealed only a handful of homes were $300 a week or less, while the median price for a three-bedroom house in the city is $330, according to the Real Estate Institute of Victoria.

In addition to that, the cost of one and two bedroom flats has increased by 15 per cent in the past 12 months.

Jenny Smith, chief executive officer of the Council to Homeless Persons, said competition was high for properties in regional areas, including Warrnambool.

She said an increase in people making a tree change, an increase in holiday rentals and declining home ownership were factors pushing rental prices up.

“Low income earners are increasingly being overlooked in favour of people on higher incomes, pushing thousands of Victorians out of the private rental market and to the doors of homelessness services,” Ms Smith said.

“Others find themselves stuck in a poverty trap, paying exorbitant rent, but with no option but to move somewhere cheaper.”

Ms Smith said a household  was considered to be in financial stress if is paying more than one third of its weekly income on housing.

She said a lack of affordable rentals was an issue in regional areas, with the vacancy rate dropping to a six-year low during the March 2018 quarter, with just 1.7 per cent of regional rentals available.

“The data is yet further evidence of our broken housing system,” Ms Smith said.

“We cannot rely on the private market to provide housing for those on very low incomes; we need government to build and buy more public and community housing.

“Social housing has been allowed to decline to just 3.4 per cent of all housing in Victoria, down from 3.9 per cent in 2011-11.”

Ms Smith said only in 10 one-bedroom rentals were affordable to a low income earner in the first three months of 2018.