The answer - it seems - is not a simple one.

Migration to Warrnambool from Melbourne dropped by 17 per cent in the 12 months to June this year and international migration to the region came to a standstill in the past two years because of the COVID-19 pandemic.

Despite these declines, the region is in the grips of a housing crisis.

And the lack of housing availability is making it difficult for business owners to recruit new staff, with some forced to reduce their opening hours.

Brian O'Halloran and Co agent Brian Hancock said changes to tenancy laws had resulted in some landlords taking their properties off the rental market.

Interestingly, however, the number of Airbnbs listed in Warrnambool and Moyne shires has declined - with 555 listed in Warrnambool in 2019 compared to 278 in 2022.

In Moyne the number available has decreased from 644 in 2019 to 488 in 2022.

A little known fact that was identified in recently released Census data is that Australian households are shrinking.

Across the nation, households decreased from an average of 2.6 to 2.5 occupants.

This trend was mirrored in the south-west, where the average number of people per dwelling dropped from 2.64 to 2.53.

If the number of people per dwelling had stayed at 2016 levels there would be more than 2000 extra houses available across the south-west, with more than 700 in Warrnambool alone.

Reserve Bank of Australia assistant governor Luci Ellis spoke about shrinking households recently.

"It is no surprise that the pandemic has changed how we think about our homes," Ms Ellis said.

"There is nothing quite like being confined to your home for months on end to make you appreciate having a home that meets your needs, or rankle at one that does not.

"Spurred by the experience of lockdown and self-isolation, many people understandably wanted a bit more space and perhaps a garden. Some also needed space where they could work, or perhaps just fewer flatmates to share that space with."

Ms Ellis said the decline in average household size increased the demand for homes.

"This helps explain why rental vacancy rates quickly returned to low levels even though the international border was closed and population growth declined to be close to zero," she said.

The south-west's housing shortage comes at a time when businesses are desperate to secure new staff.

In fact, the number of jobs advertised for the region has increased by 1000, according to a Warrnambool employment service.

WDEA Works chief executive officer Tom Scarborough said the number of vacancies had increased by 249.7 per cent since March 2020.

Mr Scarborough said the highest number of vacancies were in hospitality, labouring and housekeeping/cleaning.

"We have also started to see retailers advertising for Christmas casuals over the past two weeks," he said.

A Victorian Skills Authority State of Victorian Labour Market report states there are a number of factors contributing to staff shortages.

The COVID-19 pandemic resulted in a drop in migration and an ageing population - with 160,000 fewer working age people in Victoria in 2021 compared to pre-COVID forecasts.

"The growing demand for workers coupled with the current constraints on workforce availability is resulting in strong competition for workers, occupational shortages across many industries and other challenges for businesses and communities," it states.

"These impacts are more acute in regional areas and industries that have historically relied heavily on migrants to meet demand."

Mr Scarborough said many people interested in making a move to the area were hampered by a lack of housing.

"We have heard of people leaving Warrnambool due to the lack of housing - they are often returning to their families due to being unable to afford rent," Mr Scarborough said.

Maddy McGowan, who moved to the south-west recently from Kerang to be closer to a number of family members, said she found it difficult to secure a rental.

"I moved in with my sister originally and then I found it difficult to find a rental," she said.

Ms McGowan said she had no trouble finding a job, but had to apply for a large number of rentals before securing one.

"I had to consider moving to Geelong instead and the rentals in the area are quite expensive, especially considering I live alone," she said.

The hospitality and tourism industries in the south-west have been hit hard by the housing shortage, migration decline and decreasing numbers of international students choosing to study in Australia, according to Great Ocean Road Regional Tourism chief executive officer Liz Price.

"We've lost backpackers and we've lost international students, who also formed part of the workforce," she said.

Ms Price said in addition to that, there were some people who had relocated to regional areas who were referred to in other countries as "Zoomers".

The pandemic showed many employers that staff can work remotely, which meant some decided to seek a more relaxed lifestyle in areas including the south-west.

"There are a number of people who have moved to regional areas who have brought their jobs with them," she said.

Ms Price said business owners had faced so many challenges in the past couple of years.

She said the decrease in international visitors meant many motels, restaurants and tourist hot spots had seen a decline in visitor numbers mid-week.

There is a push to lure Melbourne residents to popular tourist destinations including Port Fairy and Port Campbell.

However, staffing shortages mean some businesses have reduced capacity to operate seven days a week, Ms Price said.

"The ability to attract visitors mid-week is diminished because the usual offering isn't there," she said.

Ms Price said there was also a misconception that jobs in the hospitality industry were "transient" rather than a career choice.

"We need to raise awareness about the type of careers the tourism and hospitality industries can provide," she said.

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