Australia needs 1.2 million new homes over the next five years, and the Housing Industry Association (HIA) says “gentle density” could be the smart solution.

For those focused on residential property investing in Australia, this shift signals new opportunities in medium-density developments.

Gentle density refers to townhouses, duplexes, and micro-lots built within existing suburbs, boosting housing supply without disrupting the character of established communities.

HIA Executive Director of Planning, Mike Hermon, says: “Australia’s housing crisis is at a tipping point, and one of the answers lies in embracing gentle density to unlock the missing middle housing solutions.”

Rather than relying only on expensive greenfield developments at the edge of cities, the HIA recommends targeted infill projects in well-serviced areas.

These include suburbs close to schools, jobs, and public transport, ideal locations for long-term investment.

Outdated zoning laws currently restrict development to either high-rise apartments or large detached homes, creating a major gap in medium-density supply.

The HIA is calling for faster approvals and more flexible planning rules to encourage diverse housing types in infrastructure-ready suburbs.