The sharp jump comes on the back of an 11 per cent rise over 12 months back in March when the median price hit $400, the latest Real Estate Institute of Victoria data shows.

That puts rental prices in Warrnambool up to $100 more than some other regional Victorian centres and $55 more expensive than the regional median price of $380 a week.

The only major regional city where it is more expensive to rent is in Geelong where the median price is just $5 more at $440.

Over the past quarter, the gap between the two centres has closed even more with it being just 1.1 per cent cheaper in Warrnambool compared to 2.5 per cent three months earlier. In the March quarter rent in Geelong was $410.

Among other major regional cities, Wodonga had the next highest median rent of $395. Bendigo's median rent for the June quarter was $340, Ballarat was $350 and Shepparton was $330.

While data on rental prices in surrounding towns is not collated in the REIV data, the median rent in Portland is $360 - a sign that seaside living came with a higher price tag than inland centres.

REIV president Leah Calnan said the rise in rental prices across many regional Victorian cities was being driven by supply and demand forces. The exodus of Melbourne people seeking a seachange or tree change was driving up the prices.

"Simply put, there aren't enough rental properties to accommodate the phenomenal increase in people moving to the countryside from metropolitan Melbourne," she said. "The Victorian government should prioritise housing supply, and encourage development by reconsidering its tax policy."

The rental shortage is not just confined to larger centres. Smaller towns in the south-west are also feeling the squeeze. Horsham's James Murphy thought finding somewhere to live would be easy when when he took up a new job working for Elders Rural Services in Mortlake.

But the lack of suitable rentals in town meant he had to live in a caravan park and hotel until he could find somewhere to live, but that proved to be "frustrating". Mr Murphy said he had struggled "big time" to find anywhere to rent in Mortlake and had to widen his search.

And after being knocked back for 17 rental properties in Warrnambool, he finally found somewhere in Hamilton to live after applying for a number of properties.

Mr Murphy has also called for minimum standards to be introduced to rental properties on the market. He said it was hard to get a rental property of reasonable standard with there being very little difference in price between a good quality home and one that was not up to standard.

"Demand is outstripping supply and you can virtually own a rental property that is probably below standard but still achieve a 100 per cent occupancy rate in it because there is no option but to move anywhere else," Mr Murphy said.

"It's a classic supply and demand situation. There's huge demand for accommodation and it doesn't matter what standard it is, it's a roof over your head really."

Mr Murphy, who now rents out his home in Horsham, said he planned to buy a home in Mortlake eventually.

The south-west has experienced extraordinary price growth over the past year and Mortlake topped the state's list for the biggest percentage growth for house values, jumping almost 40 per cent.

Western District Employment Agency (WDEA) Works chief executive officer Tom Scarborough said he "came pretty close" to sleeping rough after moving to the south-west in April 2019.

He said had never worried about where he would live until he moved to Warrnambool for the role and said housing availability and affordability were big issues in the region.

Coming from a capital city he "naively" didn't think there'd be an issue finding a rental property when he arrived. "I think housing affordability is an issue across the nation, but housing availability in Warrnambool is one of the biggest problems," Mr Scarborough said.

"I think the big issue here is the people sleeping rough and that's something we as a community need to do something about. It's high on my agenda. That you can have a city with so many people that are sleeping rough out there, and these are professionals, as a CEO I came pretty close to that myself."

He was initially able to get an Airbnb property that he shared with another person, something he'd never done in his life. "Being a professional person you wouldn't think that getting a rental would be a problem and money can solve problems but money doesn't solve problems here."

Mr Scarborough was previously the national director of the Australian Red Cross in Brisbane and also worked out of Melbourne.

"I was new to the regions and I hadn't experienced having to think about where you might live," he said. "From what I hear, and my experiences, if you move to Warrnambool for a job you're going to be hard pressed to get accommodation, unless you buy something and it's highly competitive to purchase something as well."

Owning property elsewhere, he was happy to rent in Warrnambool but said it became "more and more difficult to rent and have the security that you're going to have ongoing accommodation."

When his family finally did secure a rental, almost two years later it was put on the market and sold. "Then you're hoping an investor buys it and not someone who wants to live in it," he said.

He said they had "nowhere to go" and the family was back where they started. Houses they looked at were selling for $100,000 to $150,000 above the asking price.

After "six to eight months of looking and competing" with buyers and despite originally having no intention of purchasing a house, he bought one four months ago for greater housing security.

"It's so competitive for rentals and the market was going berserk. It was a tough time. I can only try to imagine what people are thinking who don't have access to the resources that I've got. It's terrible.

"We were looking at the amount of people that were looking through these rental properties and people with big families and young kids and thinking 'I don't want to take it'."

He suggested to the WDEA board that a property be purchased for incoming executives for future-proofing and to avoid a similar situation going forward. "They could advertise a job with accommodation, like you do in other very remote areas. It's a little bit sad that I'm thinking that."

Mr Scarborough said regional communities were known for working together to solve issues and accessibility and people sleeping rough was a major concern, calling for a collaborative approach. "Warrnambool's got a history of solving problems with Peter's Project and things like that, if people know about it. We need some solution."