Sydney's feeling the squeeze, thanks to recently introduced planning measures.
A recent reform aims to reduce the pressure for land in the growing city by offering new processes for subdividing land, decreasing the minimum lot size and lowering the costs of small lot housing development.
The changes, which came into effect on August 11, will apply in the North West and South West Growth Centres, according to the NSW Department of Planning and Environment. Investors toying with the idea of cash-flow positive properties and other types of real estate may be interested in the significant reform.
According to the Department of Planning and Environment, Sydney's heaving population is only set to increase - by 2031, the city will have an extra 1.6 million residents, all of whom will require homes to live in.
"There is an increasing demand for smaller homes to suit downsizers and smaller households. The existing planning rules in many of Sydney's greenfield housing areas have made it difficult for builders and developers to deliver the types of homes that home buyers want at a price they can afford," the department explained.
A broader range of house types, in a selection of sizes, will be available in order to meet this shifting demand in Blacktown, Camden, Campbelltown, Hawkesbury, Liverpool, and The Hills.
Smaller lots for Sydney's North West and South West Growth Centres
One initiative to tackle a growing population and explosive property demand is decreased lot sizes.
Previously, lot sizes had to be at least 250-360 square metres at a minimum. Under the housing diversity program, new processes for lots sizes between 225 and 300 square metres, and less than 225 square metres, have been introduced. High-density properties can have a footprint as small as 125 square metres.
There are opportunities for fast-tracked approval for complying developments, too.
Under the previous system, Sydney's North West and South West Growth Centres were under the jurisdiction of six different council areas, with different rules in force for different suburbs. The housing diversity program offers a comprehensive, universal method for areas that fall in these growth centres.
Industry body welcomes reform
The Real Estate Institute of New South Wales (REINSW) welcomed the changes, indicating they will be positive for housing affordability and dwelling diversity.
"REINSW has been calling for these changes for some time and we hope that this may be rolled out across other areas, including regional NSW which is crying out for a wide variety of housing styles," REINSW President Malcolm Gunning said on August 13.
However, Mr Gunning noted that attention to surrounding infrastructure will be crucial:
"It is imperative that there is good infrastructure in place and these changes allow for the right style of property to be developed in the transportation corridors."