THE dire need to renew Wangaratta's 90–year–old sewer lines and build a new waste water treatment plant could be addressed under a new plan by Indi incumbent MP Helen Haines' plan to create a $2 billion infrastructure fund.

Dr Haines is proposing the establishment of a new $2 billion Regional Housing Infrastructure Fund that would provide direct funding to regional councils and utility companies to build essential infrastructure that will enable more housing to be built in their towns.

"Right now, Wangaratta can't build any more houses because the main sewer line is at capacity," she said.

"But it'll cost hundreds of millions to upgrade that infrastructure.

"That's money a regional council doesn't just have lying around.

"My fund would provide that direct funding, so councils and utility companies like in Wangaratta can make the approvals for housing we desperately need."

Dr Haines said unlocking more housing supply in regional Victoria is being held back by constraints on water, sewerage, roads and electricity infrastructure.

"My proposal puts money on the table so we can get on and build the roads, street lights, electricity poles, community centres, gardens, sewerage systems, and childcare centres to open new areas as soon as possible," she said.

"Cost of living is a major issue in Indi at this election and housing is a huge part of that.

"We need to unlock supply and my plan would help increase the number of blocks available.

"With people flocking to our region, we need to build more houses – simple as that – otherwise, prices will just go up further."

With more housing supply, prices would level out and more rentals would become available in what is an extremely difficult market.

Dr Haines cited one person who had applied for 170 rentals in Wodonga before she found somewhere to live and the matter is just as bad for people looking to buy a home with house prices at record highs.

"In the last two years, prices are up 33 per cent in Wodonga, 34pc in Wangaratta, and 25pc in Benalla," she said.

"In some of the smaller towns it's even worse – in Euroa it's 40pc and in Bright it's 55pc.

"Both major parties have announced policies that will increase demand for existing houses, but they'll do nothing to increase supply, that's where my plan comes in."

Dr Haines said the government's existing National Housing Infrastructure Facility – a $1 billion fund designed to invest in housing–enabling infrastructure – had failed to deliver.

"This fund has been around for almost five years, it's only spent a fraction of the money, the minister decides from Canberra what it can be spent on, and it's done absolutely nothing to fix the infrastructure gaps here in Indi," she said.

"It's only added 800 houses a year, across all of Australia."

Dr Haines' plan would operate on grants–system only with robust selection criteria and all money would be delivered on a competitive basis – $500 million would land on the ground every year for the next four years.