Key takeaways
The traditional dream of a house on a quarter-acre block is evolving, with more Australians embracing townhouses, terraces, and duplexes – homes that fit into smaller, well-located parcels of land.
Medium-density housing is gaining momentum as a practical solution to the housing crisis. It bridges the gap between detached homes and high-rise apartments, offering affordability and liveability without sacrificing character.
Despite momentum, three-quarters of residential land is still zoned for detached houses, and smaller townhouse projects often face the same red tape as apartment towers. Planning rules around setbacks, deep planting, and parking minimums add further financial hurdles.
The move toward gentle density isn’t the end of the “great Australian dream” but a transformation. Families may swap backyards for courtyards, but they gain affordability, access to jobs, schools, and lifestyle amenities – making housing more attainable.
The great Australian dream of a house on a quarter-acre block is slowly giving way to something different – courtyards replacing backyards, and townhouses replacing detached homes.
New data from the Housing Industry Association (HIA) shows that gentle density – housing like townhouses, terraces, and duplexes – is becoming more common across our cities.
HIA’s Executive Director of Planning, Sam Heckel, said these projects are critical if we’re serious about addressing the housing shortage.
“Australia’s housing crisis won’t be solved without increasing medium-density dwellings,” he explained.
“Gentle density bridges the gap between high-rise apartments and traditional houses, delivering more affordable homes in the locations people actually want to live.”
The rise of the “missing middle”
For decades, much of Australia’s new housing has been polarised between big suburban houses and large apartment complexes, leaving the so-called “missing middle” largely hollowed out.
But the tide is turning.
Western Australia is leading the way, with townhouse approvals up by 63%.
South Australia (+36.7%), Queensland (+26.2%) and New South Wales (+18.8%) are also seeing solid growth.
NSW is expected to surge further, helped by the state’s new “pattern book” of pre-approved designs, which cuts red tape and speeds up approvals.
Why gentle density matters
Unlike high-rise apartments, gentle density provides a human-scale way of adding homes to established suburbs without overwhelming local character.
These smaller-scale developments are typically quicker and cheaper to deliver, helping supply keep up with demand at a time when greenfield estates face infrastructure delays and apartment projects are often bogged down by rising costs.
But there are still hurdles.
The HIA points out that three-quarters of residential land remains zoned only for detached houses, while even small townhouse projects often face the same slow approval process as major apartment towers.
On top of this, planning rules like oversized setbacks, deep-planting requirements and strict parking minimums can make projects financially unworkable.
The path forward
If governments want to hit their housing targets, planning systems need to evolve.
The HIA is calling on councils and state governments to embrace reforms that make it easier for smaller, smarter projects to get off the ground.
For Australians, this trend means we’ll see more families trading in the backyard for a courtyard – but gaining well-located, affordable homes that keep them close to jobs, schools and lifestyle amenities.
It’s not the end of the great Australian dream – just an evolution.
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