A significant shift in New South Wales’s housing landscape is underway as new planning laws allow for increased development in traditionally low-rise neighborhoods.
The changes, which took effect on February 28, are part of a broader effort by the NSW government to address the state’s housing shortage by building 377,000 new homes over five years.
The reforms impact areas within 800 meters of 171 train stations or shopping centers across Sydney, Newcastle, Wollongong, and the Central Coast. They permit buildings of up to eight storeys near train stations and shopping centers, and up to three storeys in surrounding areas.
Dual occupancies, where two homes are built on one site, are now allowed, and changes to floor space ratios enable larger projects across multiple blocks.
This transformation is creating lucrative opportunities for homeowners and developers. In some areas, like Sydney’s Rose Bay, single-story homes are selling for double their previous market value as neighbors combine properties to sell to developers.
For instance, a house on Dover Road that had been on the market for two years at $8 million was recently sold to a developer for $16 million.
However, despite the potential for more housing, concerns about affordability persist. In affluent areas like Sydney’s eastern suburbs, new apartments are fetching prices between $5 million and $10 million, depending on the view.
Real estate agent Ric Serrao noted, “I don’t think it’s doing anything for housing affordability in the eastern suburbs.” More affordable options might emerge in outer suburbs, but high prices in central areas remain a challenge.
Sydney planning consultant George Karavanas described the changes as “the biggest single change” he has experienced, with his firm inundated with requests from developers to adjust or submit new development applications.
While the reforms promise to increase housing supply, their impact on affordability remains uncertain, particularly in Sydney’s most sought-after neighborhoods.
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