Cr Rob Gersch believes overcrowding could become a major problem for the town and stressed at a council meeting on Wednesday the need for more housing.

The Karen refugees migrated to Nhill during the past couple of years, filling more than 60 positions at the town's Luv-a-Duck duck farm.

More than 100 migrants now live in the town, spread across about 15 households.

Nhill real estate agents Driscoll, McIllree and Dickinson have reported a sharp rise in rental demand especially among the Karen population.

Property manager Joanne Hiscock said the demand was steady in the buying market with house prices ranging between $70,000 and $200,000.

"We find banks are often unwilling to provide loans at the moment so refugees are looking to rent," she said.

"Because hardly any rental properties are available, landlords are making more money than usual."

Hindmarsh Shire chief executive Dean Miller said more housing was needed if Luv-a-Duck kept expanding.

"There are public safety issues with having too many people in one house," he said.

"We understand the refugees traditionally like to live in big family groups, often with three generations in one house, but we also want them to spread and assimilate into the community.

"Their cultural and sporting involvement in the town has been great, but there is still progress to be made."

He said the shire was keen to meet Luv-a-Duck representatives to find a way to create more housing.

Luv-a-Duck community spokesman John Millington said the duck farm would not take responsibility for building houses for its workers.

"We do not have the expertise and resources like mining companies to create extra housing, but we will encourage housing development," he said.

"These growing pains are a natural part of Nhill expanding and our business developing."