He said the lack of one and two-bedroom properties in the city was contributing to the city's housing crisis.

Mr Wood said the problem was identified in Warrnambool City Council's Citywide Housing Strategy, which states: "Household sizes are expected to continue to get smaller. Dwelling sizes, however, are anticipated to increase."

In addition to that, the 2021 Census found one in three homes in Warrnambool only had one person living in it.

Mr Wood said most housing in Warrnambool consisted of three bedrooms or more.

However, he has had an increasing number of inquiries from people who are interested in purchasing a smaller home that better suits their needs.

"Lots of people as they get older are still living in the houses where they raised their kids," Mr Wood said.

"For those living alone, it's not always that they want to stay in a big house.

"With most homes available in Warrnambool having three plus bedrooms on a big block, their choice is really limited."

Mr Wood said people were telling him they were looking for something different.

"They want fewer bedrooms, but also less responsibility for the gardening and maintenance that comes with a big house," he said.

Mr Wood said he believed it was this emerging trend that had led to the large amount of interest in The Botanic development on Mortlake Road.

Developers Mark Schneider and Graeme Schultz had a vision to create a neighbourhood of apartments and townhouses in a central location.

The result was The Botanic - which offers 58 apartments and seven townhouses.

"When we started construction there were no new homes being built in central Warrnambool," Mr Schneider said.

"Our research showed that many people wanted to live centrally and were considering smaller homes which better matched their needs."

Mr Schneider said apartment living was a good option for many people.

"We are really thrilled at the way people in Warrnambool have responded to The Botanic's apartments," he said.

"We only have one or two left in the current stage, but we are about to start construction of building three, which will create new options for those considering an apartment as a good investment in their future."

Mr Wood's comments come after it was revealed the cost of rent is expected to increase by 11 per cent this year.

Everybody's Home spokesperson Maiy Azize said the forecasts showed that action on social housing had become urgent.

"Rising rents are hitting home for tenants," Ms Azize said.

"Our huge shortfall in social housing is making it worse. But this housing crisis doesn't seem to be hitting home fast enough for those who hold the purse strings.

"Renters are constantly being smashed as a result of our broken housing system.

"Rents were already skyrocketing before interest rates started to rise.

"Now they're being forced to pay even more."

MCG Quantity Surveyors managing director Mike Mortlock said the nation's housing shortage was due to a lack of supply.

He said a failure to consult with landlords over changes around rentals was to blame.

"Private investors account for around 84 per cent of all Australia's rental accommodation," Mr Mortlock said.

"The fact that landlord advocacy groups have been left out of most discussions and round tables beggars belief."

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