Country areas are unable to cash in their popularity

And there is no quick fix to the problem.

Even one suggestion floated today to get country councils to change their rules on relocatable homes has hit a snag, there is more than a year-long wait for them.

Another factor which is not often considered is that most country people are staying put in their homes.

The rush from the city to the country is now well documented, but fewer country residents are moving than normal as well.

This means even fewer homes to buy or rent.

The Regional Australia Institute this week suggested possible solutions to the dilemma.

A Regional New Home Loan Guarantee, incentives for regional tradespeople, easing restrictions on relocatable homes, building more medium-density and social housing are among the measures proposed in the RAI's latest discussion paper.

New home construction in the bush had already fallen behind population growth before the COVID-19 pandemic struck.

So when city folk tried to escape the long lockdowns and better enjoy new freedoms offered by being able to work from home, they looked to the country.

Just this week the Australian Bureau of Statistics certified the city exodus, giving the country bragging rights over the city in terms of population growth for the first time in 40 years.

Regional Australia's population grew by 70,900 people during 2020-21, in contrast to a decline of 26,000 for the capital cities.

The first wave quickly snapped up available housing to buy or rent within commuting distance of their city jobs.

Now they are searching much further afield and all sorts of inventory is coming onto the market and still fails to meet demand.

The RAI has pointed out more regional people are staying in place as well which means fewer homes are being listed for sale and vacated for rent.

MORE READING: The city exodus may be permanent.

Housing prices across regional Australia were 24.3 per cent higher than a year earlier, CoreLogic said in a report in October.

RAI said the shortage in regional housing was constraining local economic growth and development, preventing regions from meeting their full potential and contributing to the post-COVID recovery.

The institute said available jobs were going unfilled simply because people had no where to live.

One suggestion was for local councils to change restrictions on "on the approval of prefabricated and relocatable homes" as a short term response to accommodation shortages.

But waits on dongas and relocatable homes are now out to 18 months because of the same shortage of building materials and labour which has hit new home construction as well.

RAI chief executive Liz Ritchie said the pandemic had created a societal shift in Australia "which resulted in more regional people staying in regions, and record interest in and movement to the regions".

"This has led to a tightening in supply across our regional housing markets, which in turn has created a set of unforeseen challenges for many local economies," Ms Ritchie said.

Ms Ritchie said recent government announcements, chiefly aiming to help new home owners raise their deposit "address only one part of the puzzle".

"Our research has found residents in at least 20pc of all local government areas face significant barriers to accessing housing finance."

She claimed city home buyers needed a 10 or 20 per cent deposit but the deposit was double that in some country areas.

"This inequity has been a contributing factor to the underinvestment in new homes in our regions."

RAI has proposed the Federal government underwrite a regional home loan guarantee.

"Our discussion paper also identifies policy options to address trade labor shortages in regions, including incentives for tradies to head to the regions," Ms Ritchie said.

"With more than 70,000 regional job vacancies, there's a widespread need for units, townhouses, and apartments in regional Australia to accommodate single professionals and tradespeople, as well as long-term residents looking to downsize.

"State and local governments need to work with developers and builders to ensure a greater diversity in housing stock so that new housing remains affordable," Ms Ritchie said.

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