NSW’s Low and Mid-Rise Housing Policy is now in force and can materially change the development potential of some Sydney properties. For buyers, homeowners and investors, that makes planning due diligence more important than ever before.
The policy is part of the State Environmental Planning Policy (Housing) 2021. Stage 1 commenced on 1 July 2024 and broadened dual-occupancy opportunities in R2 zones across NSW. Stage 2 commenced on 28 February 2025 and introduced additional low and mid-rise housing controls in selected areas around nominated town centres and train, metro and light rail stations.
What is the Low and Mid-Rise Housing Policy?
The policy is designed to increase housing choice in well-located areas. Low-rise housing can include dual occupancies, terraces, townhouses and low-rise apartments, while mid-rise housing generally includes apartment buildings and shop-top housing of around three to six storeys.
In designated low and mid-rise housing areas, the policy can change what forms of housing are permissible and introduces non-discretionary development standards for matters such as lot size, lot width, floor space ratio and building height.
Why this matters when buying property in Sydney
A property may have a different development profile today than it did several years ago. That can affect the price a buyer is willing to pay, the type of competition attracted to the site and the long-term options available to an owner.
- Development potential can influence value. A site with genuine redevelopment options may attract owner occupiers, builders, developers and investors.
- Street-by-street analysis matters. Being near a station or centre does not automatically mean every property is eligible for the same controls.
- Existing constraints still matter. Heritage, flooding, bushfire risk, aircraft noise, site dimensions and other exclusions can affect whether the policy applies.
- Local planning controls still need to be reviewed. The state policy works alongside other relevant planning instruments and site-specific requirements.
Do not rely on the map alone
The NSW Government’s mapping is a useful starting point, but it is indicative. The policy applies based on the legislation, the relevant walking distance and the characteristics of the individual site. A property that appears to sit within an affected area can still be excluded because of hazards, heritage or other constraints.
Before paying a premium for “development potential”, buyers should confirm the zoning, applicable planning controls, lot dimensions, exclusions and practical feasibility. The official NSW Planning Low and Mid-Rise Housing Policy page is the appropriate starting point for current government information.
What should homeowners consider?
For existing owners, the policy may change the strategic options for a property. That does not mean every site should be redeveloped or sold to a developer. The relevant question is whether the planning change creates genuine additional value once site constraints, construction feasibility, market demand and transaction costs are taken into account.
What should investors and developers consider?
Investors and developers should look beyond the headline zoning outcome. Frontage, lot size, access, slope, easements, existing improvements, holding costs and the likely end market can all determine whether a site is commercially viable. A technically permissible development is not automatically a good acquisition.
How Grantham Buyers Agents can help
We assess the property as an acquisition first: current market value, comparable sales, physical constraints, planning considerations and negotiation strategy. For buyers considering sites with redevelopment potential, our Development service and Full Property Buying Service can provide a structured search and due diligence process from brief through to settlement.
For location-specific research, explore our suburb guides including Annandale, Five Dock and Castle Hill.
