Fiona Stokes is a business owner who works full-time, has glowing rental references and can't find a place to live, despite being able to afford to.

She and her two daughters, 11 and 9, are living in a caravan park in Cairns after the house they were renting was sold out beneath them.

The nail salon owner is one of thousands competing for a roof over their heads in far north Queensland, a tropical paradise that's experienced a significant population boom post-COVID lockdowns.

Rental vacancy rates in Cairns, a city of almost 170,000, have been below one per cent for more than 14 months.

Real estate agents say it is not unusual to receive 200 applications for a single house or unit, with cash bribes and rental bidding wars now commonplace.

Ms Stokes says it's a dire situation. 

"The situation is just insane. There's just nothing around," Ms Stokes said.

She is paying $370 a week for a unit in the van park and her rent is due to go up another $20 soon.

"Yes, we are lucky to have a roof over our head, but we need security," she said.

"I have no privacy. It is very hard to cook on a hot plate and with no bench space, so it's hard to cook a proper meal for my kids.

Despite repeat rental applications and pleas on social media, Ms Stokes said her search for "a unit, an apartment or duplex, anything", had been fruitless.

"To be laughed at on social media for posting that I need a home for my children, it's just so upsetting," she said.

"I'm also paying hundreds of dollars a month to have my furniture in storage.

Cash bribes for homes

Real estate agents say people looking for rental properties are going to desperate lengths to secure a home, including cash bribes and offering to pay a year's rent in advance.

In Cairns, there are fewer than 300 rental properties currently advertised on a major real estate website.

Local real estate agent Alex Witten said the situation was "heartbreaking" and that it was not unusual to receive 200 applications for a single property.

He said prospective tenants were resorting to desperate measures in order to secure a roof over their head.

"On the odd occasion, a green or a yellow note might be attached to an application, which is handed straight back to them," Mr Witten said.

"They will offer to pay six or 12 months rent, in advance, which we don't ask for and, frankly, don't like."

He said constantly having to turn down applications was taking a toll on his staff.

"We are regularly confronted by distraught tenants who say to us, 'Why didn't we get this property? What's wrong with us?'.

"Last week we gave a property to a woman who was a single mother and she told us she had put in over 50 applications that had not been accepted.

"She was living out of her car, working two jobs.

"She burst into tears when we gave her the property. She just needed a bit of a start and there's hundreds of stories like that."

Mr Witten said he did not believe the housing crisis in the far north was due to a population increase, but rather landlords taking advantage of a hot market and selling to owner/occupiers.

"We've lost 400 properties over the last five years so that's 80 to 90 a year," Mr Witten said. 

Crackdown on rent bidding

The Residential Tenancies Authority (RTA) says the practice of so-called "rent bidding", which involves a real estate agent, property manager or owner asking a prospective tenant to offer more than the advertised price, is illegal.

The RTA's Sam Galer said it was also illegal for them to accept bribes and rental properties had to be advertised at a fixed price.

"A tenant is able to offer a higher amount of rent but they can't be encouraged to do so," Mr Galer said.

"It becomes a very difficult and dangerous territory if you are seen to play tenants off each other."

Additional reporting by Chris Calcino.