Two properties in McKiernan Road and another in Henry Street will be demolished to make way for the brand new homes under the plans submitted to the city council for approval.

It comes after $4.5 million worth of plans to demolish five dwellings across four properties in Merrivale and turn them into nine social housing properties were revealed earlier this month.

And it comes on top of the Salvation Army's $6.5 million project to build 21 townhouses off Mortlake Road behind its new chapel and mission centre. That brings the total to $14 million so far that will be spent on increasing Warrnambool's social housing capacity under the Salvation Army project which is part of the state government's $25 million Big Build promise.

The seven properties covered under the planning applications so far are among the $4 million worth of property the city council handed to the Salvation Army last year.

When councillors voted to gift the council-owned properties, it was with the knowledge that they could be turned into even more housing for those in desperate need of a roof over their heads.

There are five more properties that the council had handed to the Salvation Army, but it is unclear whether they too would undergo redevelopment with the city experiencing an unprecedented housing crisis.

So far eight dwellings will be turned into 15 townhouses under the planning applications before council.

Residents currently living at the properties would be temporarily relocated during construction and would then be given the opportunity to return to one of the new homes.

The most recent applications will see two single-storey houses in McKiernan Road levelled to make way for two three-bedroom, double-storey units.

The Henry Street house will go to make way for two two-bedroom single-storey units.

Salvation Army national public relations secretary Major Bruce Harmer said it had partnered with all levels of government to provide housing and wrap-around services.

He said the not-for-profit sector could often do things at a fraction of the cost that the government can. "It just seems to be the cost of living is tightening up for everyone," Major Harmer said.

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