The rush of city folk to the country is causing housing headaches

Owners of holiday homes in the country which are often left vacant outside holiday seasons are being pressured to put them on the rental market.

The lack of housing stock to rent and to buy is one consequence of the unexpected pandemic-inspired migration of people from cities to the country.

That move in population has slowed, but property experts say demand remains strong although most of the housing stock has already been "soaked up".

Another unintended side effect of the migration switch is the lack of accommodation leading to worker shortages and rent price hikes for those already living in the country.

The equation is made even worse with rising new home construction costs.

Hence the focus on any empty accommodation, like holiday homes.

Ray White chief economist Nerida Conisbee said holiday home purchases surged during the pandemic and "we now have a lot of homes vacant in many regional areas for a large part of the year".

Groups representing regional municipal councils like Regional Capitals Australia has called on the Federal government to better support regional growth.

RCA chair Cr Kylie King said regional Australia was defying predictions, continuing to experience population growth still 15 per cent higher than pre-pandemic levels.

One suggestion the RCA made was for the government to better fund boost infrastructure funding "to deal with the major damage done to regional roads due to flooding over the past 12 months".

MORE READING: Prized grazing country in western Victoria for sale

With NSW going to the polls next month, Regional Cities New South Wales, another grouping of regional councils, said the lack of available housing was a risk to regional growth.

"... the lack of available housing is impacting people's ability to move to the regions" RCNSW chair Cr Mathew Dickerson (Dubbo mayor) said.

The group has sought support for regional housing packages and build-to-rent developments.

"RCNSW will be calling on the newly elected Government to continue to work closely with local councils to increase the supply of housing by identifying and activating unused land, including crown land," Cr Dickerson said.

Build-to-rent housing was also identified as a key need by the Property Council of Australia.

Property Council chief executive Mike Zorbas said a recent survey found 45pc of Australians believe the government should arrange incentives to encourage developers to build more affordable housing stock for key workers like nurses, police and teachers.

It also found 40pc want to allow more townhouses and duplexes to be built to boost housing stock.

The Victorian Greens this week said it wanted the state government to introduce short-stay regulations, in a bid to alleviate the state's rental crisis.

The Greens said Victorians needed an inducement to make their secondary homes available as long-term rentals, rather than keeping them as short-stays where they would sit empty for most of the year outside of holiday season.

"In popular holiday destinations in regional Victoria, rents are at record levels while the number of available rental properties has plummeted," the Greens' spokeswoman Gabrielle de Vietri said.

She said the growing conversion of long-term rentals into short-stay accommodation had exacerbated an already tight rental market across Victoria.

MORE READING: Plan to tackle the problem with our bigger sheep

Ray White economist Ms Conisbee said a problem was the group which traditionally funds new rentals "isn't too keen on supplying more right now".

"As interest rates rise, we are seeing fewer property investors. The combination of this and rising construction costs means that fewer homes will be built, further exacerbating the shortage of rental properties and pushing up rents," she said.

She said advertised rents have increased by 22pc over the past year months with some parts of the country experiencing much greater increases.

With interest rates rising, the number of property investors has been falling.

The total number of new loans to investors has now fallen by 30pc from the peak in March 2022.

"Like owner-occupiers, investors are struggling to get finance and are spooked by price declines. Rental growth is continuing but is often not enough to combat increasing interest payments," Ms Conisbee said.

Don't miss out on all the latest rural property news. Sign up here to receive our free twice weekly Farmonline property newsletter.