While the City of Sydney Council has long championed a tram line through the area, even to the extent of buying properties to secure a corridor, it has found little government support for the scheme. There has been an unprecedented development boom in Sydney's inner south. But the precinct, extending from Waterloo, in the north to east Alexandria and north Rosebery in the west and south, is rapidly on its way to becoming the densest site in Australia, a situation Mr Constance says needs to be addressed. "I'm very keen on seeing light rail go to Green Square," Mr Constance told an audience at Sydney University on Tuesday. "The main reason being we've got no mass transit system for what is an area of Sydney that is putting 50 new apartments up every week – it's extraordinary," he said in response to a question at the Institute of Transport and Logistics Studies seminar.

"So light rail I think will feature very heavily through there. "I'd hate to think that if we continue to develop there without putting in that type of infrastructure, there will be major problems for people across the entire city." Mr Constance left open the question of where the route would go. The City of Sydney Council has already spent more than $40 million on acquiring land for a four-kilometre bus and light rail route from Green Square to Central. But it is understood the minister and Transport for NSW might push for a different route to try and take advantage of "value capture" from new housing developments, one which could also link with new train stations under consideration. Mr Constance, who met recently with the council to talk about its light rail plans, also faces a decision in coming months over whether to build a new metro rail station at Waterloo, which is closer to Green Square, or at Sydney University.

The comments in support of a light rail line around Green Square mark a departure from the government's position as recently as six months ago. And when former NSW Labor Premier Kristina Keneally announced the reduction of rail fares at the privately owned Green Square and Mascot stations in 2011, she said light rail "doesn't make a great deal of sense." But with development across the precinct not yet half complete, residents in suburbs such as Rosebery and Zetland have lamented that peak hour buses are already failing to cope with the area's recent rapid growth. While there are train stations at Green Square and Mascot, there are many areas within the 280 hectare urban renewal precinct that continue to be ill-served by convenient transport. Another 2,500 new apartments are expected to open in the suburbs around Green Square in the financial year alone, the City of Sydney says, and many more in the years beyond that, following what has been an unprecedented development boom in the city's inner south.

The government has given little away on its preferred site for a new metro station. UrbanGrowth NSW, the agency charged with encouraging new inner-city housing developments, is pushing for a Waterloo site while Sydney University is also campaigning hard. The NSW government has already committed to a light rail line down George Street to Randwick and Kingsford, and said it would build a line around Parramatta, but has not chosen a route. Lord Mayor Clover Moore said she "really welcomed" Mr Constance's comments and looked forward to working with Transport for NSW to make the project happen. "The population of the area is already booming and there are nearly 10,000 apartments due for completion over the next four years," Cr Moore said. "Green Square West has a heavy rail station, but the concentration of development is in the north and east parts of Green Square, an area that is a 20 minute walk from the station. Residents rely on overcrowded buses which will not accommodate future demand."

Greens transport spokeswoman Mehreen Faruqi also welcomed the minister's support for light rail. "Densely populated areas are only really viable when the services and amenities are there to support the community," Dr Faruqi said."