Tim McKibbin, the chief executive of peak industry body the Real Estate Institute of NSW, said the current housing market had been flipped on its head as people continued to work from home.

And, Mr McKibbin said, rural markets like Wagga were being hit hard because they have created such great value for outside investors.

IN OTHER NEWS

"Part of the problem is the local community. What you've done is you've built a beautiful town, you've got everything that somebody would want," he said.

"You're the author of your own misfortune in a strange sort of a way, because people want to come and live here."

Over the past 12 months, the median price of a house in Wagga has increased by 18 per cent, while units are up 20 per cent. Rent growth is also on the up - 10 per cent for houses and five per cent for units.

Mr McKibbin said part of that was caused by the continued influx of people migrating to rural areas from the city, but it was mostly down to demand for housing far outstripping supply.

"A couple of years ago the culprit for affordability was negative gearing," he said.

"[That's] got nothing to do with it ... it is really, really simple, we are in a supply and demand market and supply can't respond to the demand."

Mr McKibbin said red tape that stalls building projects and increases costs was a major barrier to providing supply, as were taxes, which make up 40 per cent of the costs consumers face when buying a property.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: