Think Tank Says “Gentle Density” Could Unlock About 1 Million New Australian Homes

A new report argues that a major—but long-overlooked—solution to Australia’s housing crisis lies in increasing “gentle density” in the middle-ring suburbs of the country’s biggest cities.

What the report finds — and why it matters

• The public policy think tank Committee for Economic Development of Australia (CEDA), together with urban consultants, found that converting just 1 in 4 standalone detached homes in major cities into dual occupancies, townhouses or low-rise units could create enough supply to add roughly 1 million new homes nationally.
• This “gentle density” approach includes modest changes such as allowing terraced housing, duplexes, small apartment blocks or dual occupancy — rather than high-rise towers or urban sprawl — in well-serviced, inner- and middle-suburbs.
• The advantage: more homes in areas where infrastructure already exists — transport links, shops, schools — so it makes better use of existing services without requiring massive new developments or significant expansion of roads and utilities.

How “gentle density” works — and what it would look like

Instead of the familiar pattern of wide suburban blocks with single detached houses, “gentle density” would see:

• Smaller lots divided for dual-occupancy (e.g., a house plus a granny flat)
• Townhouses or terraced housing replacing some old detached houses
• Low-rise units (2–3 storeys) in inner- and middle-ring suburbs, close to public transport, shops and amenities
• Smaller-scale infill rather than sprawling new suburbs — preserving neighbourhood character while increasing supply

Advocates say this could lead to a significant increase in housing supply, particularly in areas where renting and housing affordability are most squeezed.

How it could ease the housing crisis

Australia has repeatedly failed to build enough homes to meet population growth and demand. By allowing gentle-density housing:

• Supply could grow far faster than through traditional detached-home suburban growth
• More affordable housing options — such as townhouses, duplexes or small units — could become available for renters and first-home buyers
• The pressure on infrastructure and services might be reduced compared with uncontrolled sprawl or rapid high-rise development
• It could help stabilise rents and ease upward pressure on house prices, particularly in well-located suburbs

Some estimates suggest that such zoning and planning reforms — if widely adopted — might reduce median house prices by significant amounts over time and make housing more accessible for more Australians.

Challenges and what needs to change

However, reaping the benefits of gentle density isn’t automatic. It would require:

• Major zoning and planning reform — many suburbs are currently restricted to single-house zoning which prohibits higher-density dwellings.
• Streamlined approval processes — to make sure that building duplexes or townhouses doesn’t get bogged down in red tape the way many developments do now.
• Community buy-in and careful design controls — to ensure “gentle density” developments respect neighbourhood character while still providing additional housing.
• Balanced infrastructure planning — public transport, schools, services must go hand in hand with increased housing density to avoid overburdening existing networks.

The report’s authors argue that gentle density is not a silver bullet, but a “missing middle” solution that must sit alongside other housing measures — including greenfield development, affordable housing investments, and social housing expansion.

What this means for Australia’s housing future

As Australia grapples with rising rents, shortages of well-located housing, and growing pressure on affordability, gentle-density zoning offers a realistic and relatively low-disruption path to scaling up supply.

If governments at federal, state and local levels take notice — updating planning laws, removing unnecessary red tape, and supporting medium-density redevelopment — the 1 million-home potential identified by CEDA could make a meaningful dent in the housing shortfall.