The Australian Bureau of Statistics says there has been a marked increase in the number of households installing rainwater tanks.
The latest survey by the ABS found 26 per cent of Australian households are using rainwater tanks as a water source, up from 19 per cent three years ago.
It found more rainwater tanks were installed in Queensland and Victorian homes over the last three years than anywhere else in the nation.
Statistician Eric Morris says the spike has been driven by building codes and incentives.
"There had been a gradual increases in installation of water tanks over a number of years and then suddenly, especially in Victoria and Queensland, installations really [have] taken off in the last few years," he said.
"What that has got a lot to do with is the fact that some building codes are now coming out saying you should put a water tank into your building and a lot of incentives when you are building to do so."
Mr Morris says almost half of all South Australian homes use tank water.
"When we look at the age of the dwelling when people install tanks in it is very interesting, dwellings of less than one year old have got a very high installation rate," he said.