Regional NSW could be the key to unlocking Sydney's housing crisis, according to one country mayor.
Dubbo Regional Council Mayor Matthew Dickerson said the NSW Government should consider investing more into regional centres to ease Sydney's population pressure.
It comes amid plans by the state government to relocate Rosehill Racecourse to make way for thousands of homes.
NSW Premier Chris Minns announced plans to move and rebuild the 140-year-old racecourse to make way for 25,000 new homes.
Under the plans, the government would stump up more than $500 million for the new estates, a new school and one stop on the upcoming Metro West line.
But Cr Dickerson said regional areas weren't as restricted by existing space.
"I certainly see there's an opportunity for the state government and I think they could probably get away without the expensive Rosehill solution by getting people out of cities and into regional locations," he said.
"We've got a wonderful Turf Club in Dubbo, but I don't see why it would need to be relocated when we've got other opportunities and space to put housing."
It comes on the back of a regional NSW housing crunch.
While recent data revealed regional vacancy rates have increased from 1 per cent to 1.5 per cent, building approvals have slowed since mid-2021.
"Unlike many of our capital cities, regional Australia is not short of land for new housing developments," Regional Australia Institute CEO Liz Ritchie said.
"But a lack of housing is threatening to put a handbrake on regional Australia's population growth, at a time when we need more people to help fill the more than 90,000 jobs currently on offer in the regions."
Mr Minns said the redevelopment was a "once-in-a-generation opportunity".
"The government sees this as an opportunity to put its money where its mouth is and build more housing, close to transport links, with plenty of green space for new families," he said.
Some regional councils, like Wagga Wagga City, said they would consider relocating infrastructure if the right proposal came along.
Wagga Wagga regional activation director John Sidgwick said the municipality was already planning for growth to 2041 and beyond.
"Council would welcome opportunities for similar investment proposals to repurpose or relocate assets within or in close proximity to the city centre,' he said.
"We are also preparing strategies that will identify opportunities for future housing in Wagga Wagga, including for medium and high-density housing."