Australian cinemagoers tend to be wary of locally made films billed as “quirky”. There’s a general feeling we’ve had too many of them for too long, the best associated with a stretch in the 1990s when several doozies fell off the assembly line including The Adventures of Priscilla: Queen of the Desert, Muriel’s Wedding and Welcome to Woop Woop.

Writer/director Platon Theodoris’s low-budget curio, Alvin’s Harmonious World of Opposites, is certainly quirky, but not the kind Australian cinema is accustomed to. It’s more like something in the realm of Being John Malkovich, the crazy mental wilderness of Charlie Kaufman swapped out for a slighter and more sedate kind of fantasy.

In a sense Theodoris’s first feature is a single-setting film, given that quiet homebody protagonist Alvin (Teik Kim Pok) never physically leaves his tiny apartment. On video chat calls, discussing with a client his work as an English/Japanese translator, Alvin positions himself in front of a fabric pull-down screen to present the illusion he’s in an office. Really he’s sitting in front of a huge pile of plush toy pandas.

We are introduced to this mild-mannered creature as he peeps through a hole in the floor, observing a pretty young woman doing her nails in a bedroom below. Alvin will return to take a squiz every now and then but Theodoris is more concerned with what’s upstairs, in more than a single sense.

Alvin notices what appears to be drops of thick black ooze dribbling from the ceiling. When an inspector arrives in the apartment building to investigate a supposed flea infestation, Alvin reports the strange sight. It has disappeared, but the mysterious substance returns when only he is around.

Is it a hallucination? Could this seemingly what-you-see-is-what-you-get character be taking acid when we’re not looking? When Alvin pops his head into the attic, hoping to identify the source of the black liquid, the film itself starts tripping balls. He discovers something else: his subconscious. Alvin sets about exploring it.

Until this point the story has been spatially confined, like a video game in the sense that the central location is long and narrow and the protagonist interacts with things above and below him. But when Theodoris whacks the imaginarium button, the film’s space and aesthetics open up. Alvin’s Harmonious World of Opposites expands into a gloriously batty la-la land. It would be imprudent to divulge too much, lest one spoils the surprises – suffice to say there are visions of fire, midgets, barren deserts and quite a lot of soy sauce.

The film was shot in Sydney, Kalgoorlie and Jakarta. The three cinematographers (Theodoris, Hari Bowo and Vanna Seang) create a lovely look, glossy and quaint. They pay loving close-up attention to the random decorations and vintage thingummybobs stuffed inside the protagonist’s apartment, then zoom out to absorb the mad plains of his mind.

Here machinery such as broken-down amusement park rides counter the kitschy, less sensational things cluttering his apartment, from Diana and Charles tea cups to innumerable small toys and an old-school General Electric can opener. Production designers Mas Guntur and Shin Shin do a bang-up job stuffing the surface with small details.

Alvin has a shouty rough-as-guts neighbour, Virginia (Vashti Hughes), who routinely bangs on his front door and is in some way a catalyst for his venture into escapism. The vocab of this cartoon Struggle-Street-type antagonist includes delicate turns of phrase such as “slanty-eyed fucking chink”. She literally eats a cockroach and dons an ominous yellow rubber glove.

Her presence is intentionally violent and incendiary, but nevertheless she’s a boorish character brought to life by crude acting and sub-par dialogue. Whenever Virginia is on screen, it’s a virtual deathblow to Theodoris’s well-established mood and tone. Quaint and thoughtful versus shrill and grotesque. For a little while this truly is a work of opposites.

With a lean running time of 73 minutes, the film – often lovely, on occasions wonderful, and certainly never dull – never overstays its welcome. The yappy neighbour is given undue relevance at either end of the story, so Alvin’s Harmonious World of Opposites is probably best remembered if you extinguish her from it. Because remember it you will: images of this strangely splendid daydream will bounce around your head for some time.

• Alvin’s Harmonious World of Opposites is screening at selected events