20-22 June 2025
Perth Convention & Exhibition Centre

Facebook Instagram Youtube Tiktok
SUBSCRIBE
BOOK A STAND

New Housing Reforms Shaping the Future in NSW

MHNDU Architects: Pavilion. Credit: Brett Boardman

Finding a home in New South Wales is an ongoing challenge, to tackle these pressures head-on, the NSW Government has introduced significant updates to its Low and Mid-Rise Housing Policy. Aimed at delivering 112,000 new homes across the state over the next five years, this initiative is set to reshape urban housing by addressing what experts call the "missing middle."

Image: MHNDU Architects: Pavilion. Credit: Brett Boardman

What is the Low and Mid-Rise Housing Policy?

The Low and Mid-Rise Housing Policy focuses on reintroducing housing types that have been absent from NSW urban planning. These include terraces, townhouses, dual-occupancy homes, and low-rise residential flats. 

For decades, local council restrictions largely made it impossible to construct these housing types in low- and medium-density areas. Currently, only two of 33 councils in Greater Sydney allow terraces and townhouses in low-density (R2) zones, and residential flat buildings are outright banned in 60% of medium-density (R3) zones. 

Key Updates of the Policy

Effective from 28 February 2025, the new planning controls will impact 171 town centres and stations across NSW, allowing low and mid-rise housing developments within 800 metres (a 10-minute walk) of these locations. Key highlights include:
  • Dual-Occupancy and Terrace Housing: These will now be permissible in R1 and R2 zones.
  • Medium-Density Housing: Townhouses and residential flat buildings will be allowed in R3 and R4 zones.
  • Focus on Well-Located Housing: The reforms prioritise housing development around transport hubs, town centres, and areas with existing critical infrastructure.
  • Consideration for Local Character: While unlocking development potential, councils retain the ability to assess and enforce development conditions like parking, light access, and minimum frontages.
This balanced approach aims to boost housing supply while maintaining the character and liveability of NSW communities.

Why These Reforms Are Necessary

Without policy changes, New South Wales faces becoming unaffordable for young people, families, workers, and downsizers. Housing diversity has been displaced over the past several decades, with a growing gap between high-rise apartments and expansive single-family homes on suburban lots.

The “missing middle” housing types, such as terraces, townhouses, and low-rise apartments, offer a crucial solution. They provide affordable, well-located living options that meet the needs of diverse household types without sprawling into greenfield developments or relying solely on high-density housing.

Additionally, these updates will make the most of underutilised spaces already equipped with public transport and essential services, reducing urban sprawl while supporting connected, sustainable neighbourhoods.

How Housing Sites Were Selected

To ensure meaningful impact, sites for the Low and Mid-Rise Housing Policy were carefully chosen based on several criteria:
  • Proximity to Goods and Services: Locations with access to education, healthcare, and shopping were prioritised.
  • Public Transport Accessibility: Areas served by frequent transport services were earmarked to reduce reliance on cars and promote connectivity.
  • Critical Infrastructure: Site selection accounted for water, energy, and road capacity, ensuring minimum strain on existing resources.
  • Housing Targets: Growth was deliberately balanced across regions like Sydney, the Central Coast, Illawarra-Shoalhaven, and Hunter.
These reforms also align with the NSW Pattern Book, which offers families and developers pre-approved, architecturally designed plans for low- and mid-rise housing, streamlining the building process through simplified approvals.

Exemptions and Special Considerations

To maintain safety and heritage preservation, certain areas and cases have been excluded:
  • Bushfire and Flood-prone Areas: The Blue Mountains, Hawkesbury, and Wollondilly regions have been excluded due to significant bushfire and flood risks.
  • Heritage Conservation Areas: While planning controls will apply, development in these areas will require council assessment and approval. Heritage-listed properties are exempt.

How This Policy Benefits NSW Communities

The Low and Mid-Rise Housing Policy is a game-changer for urban living in NSW. Here’s how:

1. Boosting Housing Supply with Quality Options

By making low and mid-rise housing permissible, the policy opens the door to more development of affordable and family-friendly homes. This meets growing demand while maintaining diversity in housing types.

2. Improving Housing Affordability

Building a greater range of homes will reduce the competitive pressure on existing properties, improving affordability for buyers and renters alike.

3. Encouraging Sustainable Living

Focusing new developments near public transport hubs and existing infrastructure enhances accessibility, reduces commute times, and minimises environmental impact.

4. Supporting Growing Communities

By enabling new low- and mid-rise housing options, these reforms strengthen NSW communities, allowing people to live near work, schools, and parks while enjoying more connected neighbourhoods.

5. Retaining Local Charm

Development conditions, like landscaping requirements and design guidelines, will ensure that new builds complement the character of their surroundings.

Preparing for the future

The Low and Mid-Rise Housing Policy is poised to significantly improve the quality and accessibility of housing in NSW. By filling the “missing middle,” this approach will foster vibrant, affordable, and connected communities across the state. Whether you’re an investor, a first-time buyer, or a family looking for options that suit your lifestyle, these reforms offer an exciting opportunity to achieve your housing goals.

The Sydney Home Show is a great opportunity for potential buyers to explore the diverse range of housing types that will be made possible through the new Low and Mid-Rise Housing Policy. Whether you’re looking for a townhouse, terrace, or low-rise apartment, the Sydney Home Show will allow you to meet builders, architects, and developers who can show you firsthand what’s coming to your neighbourhood.

More Information

Sources:

Low and Mid-Rise Housing Policy – Planning.nsw.gov.au
Low and Mid-Rise policy to unlock 112000 homes in five years
Low and Mid Rise Housing Policy: Supporting new …
More homes need more infrastructure
Apartments and terraces to be built around 171 NSW …
https://www.planning.nsw.gov.au/policy-and-legislation/housing/low-and-mid-rise-housing-policy
https://www.planning.nsw.gov.au/news/low-and-mid-rise-policy-to-unlock-112000-homes-in-five-years
https://www.millsoakley.com.au/insights/low-and-mid-rise-housing-policy-supporting-new-housing-but-with-complex-rules/