For the first time in his life, Alistair Bowie, 26, doesn't have to share a home with up to a dozen extended family members.

Severe overcrowding, the nation's most common form of homelessness, affects about a third of all remote Indigenous Australians, according to 2016 Census figures.

Mr Bowie remembers well the pressures he felt growing up in such an environment.

"There's too much hassle in an overcrowded house, there's no space, no room," Mr Bowie said.

"Living in a small two or three-bedroom house with 12 people in one home and trying to fit everything together, like work or how you're going to put food on the table … you can't feed your own family."

Nowadays, the Lockhart River local lives in his own three-bedroom home with just his partner and three children.

Alistair Bowie (left) is part of an all-local construction crew that has built 30 new houses. ( Supplied: Christine Howes )

This Kuuku ya'u and Anggamudi man is immensely houseproud, which is understandable considering he helped build his home with his own two hands.

"There are moments, I get home from work, sit back, relax and think, 'I built this house'. It feels good," Mr Bowie said.

"I wish I could build more and just give that bit of happiness and confidence to others around [the] community — it's good to give them a bit more space."

Mr Bowie is part of an all-local construction crew that has built 30 new houses in the remote east-coast Cape York community, which is home to about 700 people from four different clan groups.

The additional homes have increased Lockhart River's housing stock by about 20 per cent.

Building homes, building skills

The Lockhart River Aboriginal Shire Council has invested heavily in skills development over the past six years to take advantage of funding formerly available through the Rudd government's National Partnership Agreement on Remote Indigenous Housing (NPARIH) to build a local workforce.

The housing works and funding arrangements have provided carpentry and plumbing apprenticeships, training opportunities and ongoing employment for 12 young men.

The community can now build its own infrastructure rather than being reliant on fly-in fly-out contractors.

Mayor Wayne Butcher is frustrated there's no new funding agreement for remote housing. ( ABC Far North: Brendan Mounter )

Mayor Wayne Butcher said that had "turned the tide"; not just in terms of housing people, but by helping build the foundations of a prosperous local economy and a spirit of self-determination.

"We've gone from where we were just day-to-day maintenance people to where we control the whole investment in housing into the community," Cr Butcher said.

"We had to build that trust with the Government to say, 'Lockhart River people can build houses, we can build roads', and if we get that opportunity then we will build our people.

"Once we build people, we will build community.

"It was a challenge. But, if you dream the impossible, anything can be done. And we've proven that."

Overcrowding 'gap' closing but no new federal–state agreement

NPARIH (later renamed National Partnerships on Remote Housing or NPRH by the Abbott government) was a 10-year shared commitment between the federal, state and territory governments.

It provided $4.6 billion between 2008 and 2018 to address severe overcrowding and poor housing conditions in remote Indigenous communities.

In Queensland, the program delivered 1,144 new houses and 1,490 refurbishments at a cost of $1.126 billion.

NPARIH funding has seen the construction of 30 new houses in Lockhart River. ( Supplied: Lockhart River Aboriginal Shire Council )

According to the 2017 Review of Remote Housing, overcrowding decreased in Queensland's Aboriginal and Torres Strait Islander local government areas from 46.6 per cent in 2007 to 25 per cent in 2016.

But the same review also found that a further 5,500 houses would be needed by 2028 nationwide to continue efforts to close the gap on Indigenous disadvantage.

28 homes have been built at Nyiimuchin Village, Lockhart River's first subdivision in 23 years. ( ABC Far North: Brendan Mounter )

It also said that the costs of future funding programs should be shared equally between the Commonwealth and the states.

NPRH concluded in 2018 but no new agreement between the Queensland and Federal Government has been reached, with both sides blaming the other for the breakdown.

Cr Butcher is frustrated by the situation, which he describes as a "political football".

"Hopefully they could put their differences aside and see the importance of housing and the policies at the national scale around closing the gap in health and in education," Cr Butcher said.

"You won't achieve it unless you got a proper safe health [and] a place proper safe environment to live in."

The Morrison Government made an election promise of $105 million to fund remote Indigenous housing, one month after any specific measures could have been included in the April federal budget.

The Palaszczuk Government followed up by announcing $1.08 billion over 10 years for housing in remote communities, a commitment included in Queensland's June budget.

In a statement, a spokesperson for the newly launched National Indigenous Australians Agency, a branch of the Department of Prime Minister and Cabinet, said Commonwealth officials met regularly with Queensland Government officials to ensure housing was delivered in a coordinated way.