Figures released in the third quarter Rental Report yesterday revealed the average price for a three-bedroom home was $190 a week - a 5.6 per cent increase in 12 months.

The average price for a one-bedroom flat had also increased 5.3 per cent to $100 per week.

Real Estate Institute of Victoria Ballarat branch chairman Trevor Booth said the hike was related to the city's low residential vacancy rate, which stood at 2.2 per cent at the end of September.

"Low vacancy rates generally mean not as many properties are available, so rents tend to rise," he said.

"If you're an owner, it's good news. If you happen to be a tenant, you will probably have to contend with some possible increases in rents over the next 12 months."

However, Mr Booth said Ballarat's rental average remained less than the overall state median ($215), and on par with non-metropolitan medians ($175), despite the growth.

"In comparison, Ballarat's median rental prices are fairly in keeping with state medians," he said.

But Housing Minister Candy Broad criticised the rises.

She said low-income earners, especially singles, would find it difficult to rent private homes in their price range.

"Affordable homes in the private rental market in the Grampians continue to be in short supply," she said.

Ms Broad also said median rent in the Grampians had increased six per cent ($10), compared with 2.4 per cent ($5) across Victoria as a whole, since the June 2005 quarter.

Metropolitan Melbourne's median rent for the September quarter remained unchanged at $230 a week.

"The Bracks Government believes that every Victorian deserves a decent place to live, which is why we are concerned that private rentals are getting out of reach for some families," Ms Broad said.

"The cost of private rental accommodation across Victoria continues to rise faster than the rate of inflation and there has been a significant decline in the number of affordable one-bedroom flats."

The report revealed the most affordable places to rent in and around Ballarat were Sebastopol, Delacombe, Wendouree, Horsham, Mt Clear and Buninyong.