It is the little town with a growing problem.

For years Kingscliff, in northern New South Wales, has been known as a quiet beach spot between the Gold Coast and Byron Bay.

But things are changing.

Gaida Macs and Julie Murray on the beach at Kingscliff. ( ABC Gold Coast: Damien Larkins )

Since 2011 its population has grown by 13 per cent, and it is now big enough to be classified as a town and not a village.

Kingscliff Ratepayers Association president Gaida Max has noticed extra residents moving in.

"From my understanding a lot of it is coming from the Gold Coast, but there is a significant number also coming from southern states to a warmer climate," she said.

The challenges of a bigger population

With a population of more than 9,000 people now, Kingscliff is also experiencing growing pains.

A planned major $500 million hospital is dividing residents.

Ms Max said it is proposed to be built on state-significant farmland.

"There is concern if the State Government rezones it, puts a hospital there, the domino effect with start on all the other agricultural land around the area," she said.

The farmland at the centre of the hospital location debate. ( ABC Gold Coast: Elise Kinsella )

The NSW State Government said the hospital will meet the needs of the growing population in the region.

At the time the location was announced, the NSW Health Minister Brad Hazzard said three sites were investigated for the hospital.

"These sites were assessed against the original evaluation criteria and this, along with community feedback, has confirmed the proposed site opposite Kingscliff TAFE remains the best site for the new hospital," he said.

Parking problems and building height limits have also caused friction in Kingscliff as the town grapples with how it develops without losing its small town feel.

While some residents fear Kingscliff could be destroyed by its own popularity, others are seeing benefits from its development.

Growth supporting businesses

Daniel John said that a growing population is helping his Kingscliff business. ( ABC Gold Coast: Damien Larkins )

Daniel John and two business partners bought a cafe in Kingscliff 12 months ago, after moving down the coast from Brisbane.

He had earlier spent 11 years in the Army, and his cafe is named Brothers as a tribute to his time in the military.

Mr John said the town's growing population has been good for business.

"We're putting more and more staff on every holiday period just to try and keep our staff happy because you have to do that and then to keep the customers happy," he said.

Mr John does not think the town is growing too quickly, and likened it to popular Noosa on the Sunshine Coast.

"The way it is growing at the moment, it is not getting too big for its own shoes," he said.

"Kingscliff itself is growing steadily, it is not going to be a rapid change overnight."

What other areas are growing?

Regional Australia Institute general manager of policy and research, Kim Houghton, said many of the people moving to Kingscliff are aged between 20 and 35 with children.

"I was curious about who those people are — are they people looking for lower-cost lifestyle near the Gold Coast? I think not," he said.

"The average incomes of these new people is slightly higher than people who are there already, and there is a bit of a bulge in those people coming in, those younger families who are on quite high incomes."

Mr Houghton said Kingscliff is not the only small town to deal with the challenges and opportunities that population growth brings.

He said coastal areas that are close to a larger city and an airport and have good digital communication infrastructure tend to be most popular.

"There is certainly a strong preference for Australians to live by the sea and you can see it in the mix of housing prices," he said.

"The areas with the strongest growth now are typically slightly less expensive than the previous hot spots."

Only time will tell how long Kingscliff remains a hot spot for, and how well it manages to blend the old with the new.