If you’ve been watching the property market in NSW, you would have noticed a distinct trend: the “Great Australian Dream” is being redesigned. The sprawling quarter-acre block is rapidly giving way to smarter, higher-density living solutions.
For developers and builders in the region, this presents opportunities in areas that will soon be considered ‘underutilised’.
At Allen Price, we are seeing a significant shift in how land is valued, zoned, and developed. With the NSW Government’s aggressive housing targets and new planning reforms, the focus has moved from outward expansion to upward and inward densification.
Here is why blocks are getting smaller and what the developments of the future will look like.
The “Why”: Efficiency, Affordability, and Infrastructure
The shift toward smaller lot sizes is not accidental. It is a direct response to the housing crisis and the NSW Government’s commitment under the National Housing Accord to deliver 377,000 well-located homes by 2029.
According to the NSW Department of Planning Housing and Infrastructure, the primary driver is well-located housing. Rather than releasing land on the urban fringe which requires expensive new roads and utilities, the government is incentivising density where infrastructure already exists.
This has led to the Transport Oriented Development (TOD) Program, which focuses high-density growth around train stations and town centers. For landowners, this means:
Infrastructure Efficiency: Leveraging existing transport, sewer, and water systems reduces the per-dwelling cost of development.
Affordability: Smaller land components per dwelling allow for a more accessible price point for buyers, increasing market liquidity for developers.
Lifestyle Shifts: Modern buyers are prioritising proximity to amenities (cafes, transport, beaches) over large, high-maintenance backyards.
The “Missing Middle”: What Future Developments Will Look Like
We are moving away from the binary choice of “freestanding house” vs “high-rise tower.” The future of town planning in our region is the “Missing Middle”, low and mid-rise density that fits comfortably into existing suburbs.
Under the Low and Mid-Rise Housing Policy, we expect future developments to look like:
- Manor Houses & Terraces: Two-storey buildings that look like a single large home but contain 3–4 dwellings. These are now permitted in many R2 Low Density zones.
- Mid-Rise Apartments: 3 to 6-storey apartment buildings located within 400m–800m of transport hubs (like Wollongong, Kiama, or Nowra centers).
- Shop-Top Housing: Mixed-use developments that reactivate local streets with retail on the ground floor and living spaces above.
The New Town Planning Requirements: Zoning & Green Space
With higher density comes a higher standard of Town Planning responsibility. You cannot simply squeeze more people into a suburb without giving them space to breathe.
Here is what you need to know about the zoning and design requirements for these new projects:
1. Small Backyards = More Public Space
As private lots shrink, public space becomes the extension of the home. The NSW Government’s Greener Places framework identifies public open space as “essential infrastructure,” just like roads or drainage.
Requirement: New high-density precincts will often require contributions toward local parks that are within a 200m–400m walk of residents.
Design: It’s not just grass; councils are looking for “high-performing” green space that manages stormwater (Water Sensitive Urban Design), reduces urban heat, and provides recreation.
2. Non-Discretionary Development Standards
To fast-track approvals, the government has introduced “non-discretionary” standards for mid-rise housing. If your proposal meets specific criteria (e.g., building height, setbacks, and car parking), Council cannot refuse it on those grounds.
3. Zoning Flexibility (R2, R3, R4)
Strict zoning boundaries are softening. The reforms allow:
- Dual Occupancies in all R2 Low Density Residential zones.
- Residential Flat Buildings (apartments) in R3 Medium Density zones if they are near transport hubs.
How Allen Price Can Help You Adapt
The “shrinkage” of land blocks represents a massive opportunity to unlock value in sites that were previously underutilised. However, density requires precision.
Town Planning: We navigate the new Housing SEPP and TOD controls to identify exactly what yield your site can achieve under the new rules.
Surveying: Smaller blocks mean tighter boundaries. Our registered surveyors ensure your subdivision layout maximises land usage without encroaching on easements or setbacks.
Civil Engineering: Density adds pressure on infrastructure. Our engineers design the stormwater and sewer systems required to support multi-dwelling developments, ensuring Council compliance from day one.
Is your land ready for the future of housing?
The rules have changed, and the potential for your land has likely increased.
Contact the Allen Price team today to discuss how we can help you maximize your next development project.
