The NSW Deputy Premier John Barilaro has described the housing crisis gripping regional NSW as a "champagne problem".

Rental vacancies in many areas of regional NSW are under 1 per cent, and the growth in regional median house prices is outstripping Sydney.

But Mr Barilaro said that was not necessarily a bad thing after years of drought and "the demise of regional NSW off the back of bushfires" in 2019 and early last year.

"It's a new tale, a new story — there's a new renaissance for regional NSW," he said.

Mr Barilaro's comments did not sit well with the Coffs Harbour-based charity Hope for the Homeless chief executive Dean Evers, who has been supporting scores of people struggling to find a place to live amid a rental market with a vacancy rate of 0.5 per cent.

"Does [John Barilaro] mean that we're about to pop? It's about to explode here in Coffs Harbour," Mr Evers said.

'Hardly a champagne situation'

Mr Evers said the situation on the Coffs Coast was "hardly a champagne situation" and more like the desire for "champagne on a beer wage".

He's been working to support people living in cars, tents and living with friends because they are unable to find a rental or afford a house.

Rents rise by 40 per cent

On the North Coast, Knockrow resident Nicole Sullivan is looking for a new rental home for her family after being told the rent on their current house was rising from $600 per week to $1000.

Ms Sullivan has rented the home for three years and admits they considered the rent a good deal.

"We thought that an increase would be coming, and we do respect that, but it's just the amount is truly unrealistic for our family," she said.

Ms Sullivan said she was now scouring the market for a house, but anything priced between $750 and $800 was very hard to find and snapped up before she's had a chance to gain an inspection.

While she said her family would "fall on their feet", she was concerned for other families who had nowhere to go and for the community they had built.

Councils blamed for lack of development

While Mr Barilaro recognised the hardships experienced in the regional housing market, he said it would take time to work together with all tiers of government — federal, state and local — to find a solution.

He said one of the main issues was the unwillingness of some councils to release land to developers.

Mr Barilaro said some councils wanted growth in their regions but didn't pursue development opportunities to drive population increases.

"I meet a lot of councils across the board who are anti-development, anti-residential development, anti-greenfield-site development, anti-urban infill," he said.

"At the same time, the [housing] supply becomes a serious issue."