The latest release of the Rental Affordability Index (RAI) found that the average regional renter in NSW, on an income of $73,000 per annum, would be unable to afford to rent in any of the state's coastal markets.

Rents that make up 25 per cent or more of a household's gross income are considered moderately unaffordable, according to the report.

A score of 100 or less on the RAI indicates that 30 per cent or more of household income is being spent on rent - indicative of "rental stress".

Rents range from being 'moderately unaffordable' in areas like Forster, on the Mid North Coast, to 'extremely unaffordable' in areas further north, like Byron Bay.

The index is produced by National Shelter, SGS Economics & Planning, the Brotherhood of St Laurence and Beyond Bank Australia.

The report comes as the Real Estate Institute of NSW reported that some markets on the state's coastline were clocking rental vacancy rates as low as 0.2 per cent in October.

Rental vacancies in October were at 0.2 per cent on the South Coast, down from 0.4 per cent in September; 1.3 per cent in the Illawarra, down from 1.9 per cent; and 0.9 per cent in the Hunter, down from 1 per cent.

The entire regional NSW market received a RAI score of 113, meaning the average rental household there would face the prospect of paying 26 per cent of its total income on rent.

Report author Ellen Witte, a partner at SGS Economics and Planning, said that migration from capital cities during the pandemic had worsened affordability in areas along the coast and in popular 'tree change' cities.

"A lot of households chose to escape the cities due to extended lockdowns and as a result of that we saw households moving out and pushing up the rental rates in regional areas," she said.

On the coast, changes are most pronounced in areas including Tweed Heads, Woolgoola, Port Macquarie and Kiama, but popular inland 'tree change' areas such as Cooma, Orange, and Mudgee had also experienced worsening affordability.

In Kiama, the RAI score is currently 73 (based on a household income of $75,000), indicating rents are 'severely unaffordable'.

Port Macquarie scored 94, indicative of 'unaffordable' rents.

Orange scored 103, indicating 'moderately unaffordable' rents.

The picture is even more grim for those reliant on government benefits for their income.

Port Macquarie received a score of just 38 for renters in the 'single person receiving benefits' category, indicating they would pay 60 per cent or more of their income on rents.

Rental affordability in regional Victoria has also decreased since the onset of the pandemic, according to the report, currently sitting at 116 based on the average gross income of $72,240 per annum.

In Ballarat, the score is 115 and in Bendigo it's 112 (based on an income of $70,000), meaning rents are considered 'moderately unaffordable'.

Those in the 'dual income with children' category (which does not distinguish between regional and metro areas and assumes a combined income of $198,000 per annum) fare better, with the majority of markets in regional Australia still affordable.

The lower average income of existing regional renters meant existing renter households were particularly vulnerable to changes in the market.

"We've seen pretty much a tripling of migration flows from cities to regional areas ... For regional areas it makes a big difference if there's all of a sudden 7000 extra people in the region," she said.

Tasmania's unenviable position

Perhaps the most exposed market to this trend was the regional Tasmania market, where households had a much lower average income of $59,200 per annum.

As a result, regional Tasmania (excluding Hobart) was the least affordable 'rest of state' or regional area in the country, with the current RAI score of 103 representing a significant decline from 114 the year prior.

Hobart is the least affordable capital city for the average rental household.

Ms Witte said allocating a greater proportion of income toward rent meant other areas of spending, such as on medical care or education costs, were inevitably neglected.

In the case of education, this could lead to "intergenerational consequences".

"It's really pushing people into a poverty trap because you don't have funds to pay for other household needs," she said.

Regional renters struggling to keep up with their rents would be forced to either move further away from employment or make compromises on the quality of rental housing they were living in, the report said.

It's a familiar situation for mother of two Stacey Lodge, who has resorted to parking a rented campervan in the car port of an unused property in Invermay (a suburb of Launceston) for the past month.

Ms Lodge has been unable to secure permanent accommodation for herself and her children for almost two years, after being evicted from a house in Waverley in 2019.

As the pandemic hit and housing in regional Tasmania began to tighten, Ms Lodge found herself unable to secure a lease for the few properties she could still afford.

"Rentals are getting 30 or 40 applications, and they won't give you a look if the rent exceeds 33 per cent of your income," she said.

Since then, Ms Lodge has been moving between a string of temporary accommodations, sometimes through government programs or shelters, other times staying on friends' couches or paying high nightly or weekly rates at hotels to ensure her children had a safe place to sleep.

"I'm starting to run out of options," she said.

"I know ten other homeless families around here going through the same thing," she said.

More than for her own sake, Ms Lodge's concern and frustration is for her children, aged five and eight.

"I'm just trying to keep them in school."