Research: Greenfield grow and railway retreat

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Sep 2023

By Mecone

By Mecone

Figure 1 – Home ownership rate over the past 40 years by age, IGR 2023; Source: Treasury, AIHW analysis of customised ABS Census data (1981-2021).

By David Alsop, Graphics by Winston Yang


The realm of Strategic Planning has seen a whirlwind of activity in recent weeks. The headlining act was The Treasury’s release of the 2023 Intergenerational Report (IGR). Amongst the many detailed forecasts and insights a few trends stand out – Australia should plan for continued population growth, an aging population, and the need to design cities that respond to the challenges of climate change and more frequent and damaging natural disasters.

The IGR also highlighted what all younger Australians know all-too-well – home ownership rates have fallen dramatically over the last 40 years. Without action, this negative trend is unlikely to improve.

This was echoed in the Committee for Sydney’s latest paper on Chronically Unaffordable Housing, which identified Sydney as the world’s 6th most unaffordable city among the Top 200 Global Cities, and found that Sydney has been getting less affordable over the past decade. They identify the roots of these issues are in part due to a mismatch between population growth and investment in housing and infrastructure, a dependence on owner-occupier housing tenure, and a culture of housing as an investment asset.

On top of this has been a report from PropTrack indicating housing affordability is at its worst level in at least three decades, Australian Housing and Urban Research Institute (AHURI) reporting on growing challenges in ensuring suitable housing for older households, and the Australian Bureau of Statistics releasing a new dataset identifying that only 1.3% of dwellings are inactive [1] – putting to bed the one million empty homes myth.

Federally, National Cabinet has agreed a national target to build 1.2 million new homes over the five years from 1 July 2024. Crucially, this agreement comes with support – a $3 billion performance-based funding pool to support states and territories who achieve more than their targets and undertake reforms to boost housing supply and improve affordability, and a $500 million competitive funding program for local and state governments to kick-start housing supply.

Looking to NSW, Premier Chris Minns has announced the Department of Planning and Environment (DPE) will be split into two new entities – with the new Department of Planning, Housing and Infrastructure having a laser focus on housing delivery.

At a grassroots level, the YIMBY (Yes in my back yard) movement is growing. The latest group to be launched is Housing Now – bringing together the Committee for Sydney, the Sydney YIMBY movement, the NSW Vice-Chancellors’ Committee, the Health Services Union, the Shop, Distributive and Allied Employees Association and Business NSW. This diverse group is lobbying for building 375,000 homes in NSW over five years and has presented a range of ideas to support this – including pre-approval of housing from a ‘pattern-book’ design.

The ever-growing body of evidence tells a very clear story. NSW, and Sydney in particular, needs more homes. With consensus across multiple levels of government and an increasingly vocal community, the obvious next question is ‘Where?’


Over the last five years Sydney’s answer has generally been a mix of infill and greenfield, with greenfield making up a growing share of new housing. Data from DPE’s Greater Sydney Urban Development Program Dashboard shows that in 2017-18 around 18% of new homes were built in greenfield areas, and around 42% of new homes were built within 800 metres of a train station. The latest data for 2022-23[2] shows around 47% of new homes were built in greenfield areas – more than double the share five years earlier. Conversely, the share of new homes built within 800 metres of a train station had fallen to around 31%.

[1] As evidenced by no sign of recent use and no use of electricity.

[2] Data to March 2023, accessed September 2023.


Source: NSW Department of Planning and Environment

A clear trend can be observed looking over the last decade, with greenfield housing consistently making up a larger share of total new completions since 2012-13. By contrast while transit-oriented development grew from 2012-13 through to 2019-20, since then new dwellings within 800 metres of a train station have made up a smaller share of dwelling activity as greenfield housing has taken centre stage.

Source: NSW Department of Planning and Environment
Source: NSW Department of Planning and Environment

Relying on Sydney’s greenfield areas to continue to supply around half of all new homes is not sustainable. Mecone has analysed data for the North West, South West, Greater Macarthur and Wilton Growth Areas, and found that the residential zoned land is quickly filling up, with large swaths of residential zoned land already developed or with a DA issued for the site and likely to be built out in the near future.

Furthermore, most of the additional land that could be rezoned has some form of environmental constraint that needs resolving before development can occur – such as bushfire risk, flood prone land, or biodiversity. While these constraints may not ultimately prevent new housing development from occurring, they add additional costs, challenges, and time to new housing delivery.

Figure 2 - North West Growth Area
Figure 3 - South West Growth Area
Figure 4 - Greater Macarthur Growth Area
Figure 5 - Wilton Growth Area

And that’s not all. New enabling infrastructure is required for most of these lands, which comes with a multitude of additional challenges. Sydney Water’s Growth Servicing Plan 2022-2027 indicates that large parts of the Growth Areas are still in the Strategic Planning, Option Planning, or Concept Planning stages – with significant additional work required to extend services or increase trunk capacity for the provision of drinking water and wastewater.


In the paper Planning for growth, developed by Committee for Sydney and Mecone, we estimated that there is capacity for around 210,000 additional dwellings in Sydney under current planning controls.

Mecone also estimated that Sydney had an accumulated historical undersupply of about 96,000 dwellings as of census night 2021. This is about 50,000 greater than latest estimates by the NSW Government. Our estimation accounts for the observed reduction in average household size that comes from people showing a preference for more space and a smaller number of people making up a household.

Under the current housing targets, capacity for 210,000 additional dwellings would equate to around seven years supply. However, once the historical undersupply of 96,000 is factored in, this means there is less than four years’ additional supply remaining under current planning controls.

The challenge we identified is that most of the land zoned for development within Sydney has very little additional capacity for housing. This is because it is either zoned for low densities, and already sits at its commercially highest level of value with single detached houses, or it is zoned for other purposes such as industrial, business or infrastructure.

The development funnel, illustrated below, is a representation of the many reasons why a site which is zoned for housing might not be developed. As you travel through the development funnel more and more development sites drop off. Ultimately, only a small subset of zoned land will ever be developed into new housing.

These factors may in part explain the drop in transit-oriented development since 2019-20 observed in DPE’s net completion data. While ensuring sufficient land is zoned for housing is essential the enabling development, zoning rules must be appropriate to ensure potential redevelopment to a denser built form is economically feasible.

Figure 6 - Developement funnel

We know that more houses are needed. Enabling balanced development between infill and greenfield land requires thoughtful consideration of these challenges.

The development of planning policy and the identification of potential sites for rezoning needs to be built on a strong evidence base that considers the true realisable capacity of sites for housing within these real world economic and physical limits.

It is often more economically and environmentally sustainable to develop in existing urban areas. Better utilising existing infrastructure, such as public transport, underutilised local schools, areas with good existing amenity and access to jobs should be the focus for new housing. This should be balanced with prioritising greenfield areas that are easily serviced and benefit from investment such as new transport infrastructure.