A new report on rental affordability in Australia's eastern states has revealed Byron Bay is ahead of Sydney and Melbourne on the list of problem areas.

Key points: Rents in Sydney are higher than Byron Bay, but so are incomes

Rents in Sydney are higher than Byron Bay, but so are incomes That means housing in the tourist town is rated as less affordable

That means housing in the tourist town is rated as less affordable The study was done by non-government, not-for-profit social housing group Compass Housing

The New South Wales tourist town was rated least affordable when the average rents were measured against the median weekly incomes of renting households.

It found the average rent in Byron Bay was $590 per week — 48 per cent of the average household income for renters of $1,218.

The study by Compass Housing — a non-government, not-for-profit social housing group — revealed the town trumped Sydney, where rents were more expensive but incomes were also higher.

Here is how Byron Bay stacked up against the most expensive areas in Sydney, Melbourne and Brisbane for average weekly rent and household income of renters.

Local Government Area Ave. rent Ave. household income Percentage Woollahra (Sydney) $800 $1,814 44% Brighton (Melbourne) $650 $1,532 42% Eatons Hill (Brisbane) $510 $1,312 39%

All the areas exceed the 'rental stress threshold' — where weekly rents are more than 30 per cent of household incomes.

The report found a typical renter in Byron would need a pay rise of almost $750 a week to avoid rental stress.

"That means your typical rental household would need a 61 per cent pay rise, basically, to avoid housing stress on a median-priced dwelling," Compass spokesman Martin Kennedy said.

"I don't know if anyone you know has got a 61 per cent pay rise lately; I certainly don't."

The report found six of the seven least affordable areas in regional NSW were on the north coast.

Others affected were Ballina, Grafton, Tweed, Coffs Harbour, and Port Macquarie.

Financial counsellor Simone Hickey said rental affordability had hit a crisis point on the Northern Rivers.

"We've got low-income earners, these are families who cannot miss a rental payment or a mortgage repayment, so they go without basic necessities," she said.

It can be hard to find a place to rent in NSW's Northern Rivers. ( ABC North Coast )

Vacancies also a problem

There is another problem compounding affordability in the state's north.

The latest data from the Real Estate Institute of New South Wales (REINSW) revealed rental vacancy rates in the Northern Rivers were the state's lowest, at 1.3 per cent of properties.

Greater Sydney was at 2.8 per cent.

Mr Kennedy said, while short-term holiday letting was likely to be a contributing factor to rental stress in Byron Bay, it was not the sole cause.

"It's possible that there's an impact resulting from short-stay accommodation through the various online sites to allow you to rent your property out to people who are staying for a short time as opposed to those who are renting long term," he said.

"But realistically, it's remarkable to see that the impact is being felt just as much if not more in the regions than it is in some of the most expensive suburbs in the country."

Byron Bay Citizen of the Year Gregg Miller says he considered living in his car at one point, it was so difficult to find a place to rent. ( Supplied )

Byron Shire Citizen of the Year Gregg Miller knows firsthand the toll of the rental crisis in Byron Bay.

After 17 years living in the Byron suburb of Suffolk Park, the 57-year-old was told he needed to find a new place to live.

Mr Miller said he searched for four months and went to countless inspections where up to 60 people would arrive for a single viewing.

"It's been very difficult," he said.

"At the same time that I was actually given my notice, three other elderly residents in my same area, within walking distance of my home, were all given notice as well."

Eventually, Mr Miller said he found a place to live in Pottsville, about 50 kilometres north of Byron Bay, but the move meant saying goodbye to long-standing friends, neighbours and community groups.