"A lot of people were going 'oh beauty, I'm going to build a duplex too."

Home owners banking on planning changes that would allow them to build duplexes on narrow blocks have had their hopes dashed.

A new planning code designed to fast track the supply of medium-density housing was put on hold in the City of Ryde and the City of Canterbury Bankstown this week – with the state government choosing to delay the policy announced just last month. Concerned that the rapid rate of residential construction is outpacing the supply of infrastructure, the government slammed the brakes on new residential planning proposals and suspended the new planning rules.

They’ve also halted the plans of local property owner Leo Hsieh who intended to build a duplex on his Melrose Park investment property this year.

With a street frontage of less than 13 metres his property falls well below the City of Ryde’s current 20-metre minimum for a duplex site, but it would have been wide enough to be approved as a complying development under the new medium-density housing code.

“It would have just scraped in past the 12-metre minimum,” he said. “After I heard [about the code] I rang two or three certifiers to get a budget figure, I was finding out what it would cost to build … and I was about to get the ball rolling on getting the design done.”

“A lot of people were going ‘oh beauty, I’m going to build a duplex too.”Leo Hsieh, Ryde property owner

“I think a lot of people were going ‘oh beauty, I’m going to build a duplex too’,” he said.

But his plan to redevelop his 816 square metre block is now in limbo.

He’s not alone, according to selling agent James Sarzano of Ray White North Ryde, who has been fielding calls in recent weeks from home owners hoping to cash in on the changes.

“I’ve had a number of people calling me who have literally been waiting for these laws to come out, hanging by a thread, hoping they’re sitting on a gold mine,” he said.

“To have that robbed from them is a bit unfair, but [stopping this] is what most people supposedly want in Ryde.”

With about 60 per cent of Ryde zoned for medium-density development, council figures suggest that under the new changes the number of sites that could be developed for medium-density housing would increase from 4082 to an estimated 14,465.

“Ryde could basically become a big construction site, a lot of guys were going ‘you hoo I’m going to make a lot of money’,” Mr Hsieh said.

The decision to defer the roll out to the two councils follows advice – requested by the government, and provided by the Greater Sydney Commission – about where development is straining local infrastructure.

Mr Sarzano said he had been “knocked off his feet” when a North Ryde property with an 18-metre frontage went on the market in recent weeks.

He said the imminent planning changes had made a big difference and suspected it drove up the sale price by more than 10 per cent. “A month before it would have sold for about $1.5 million, and it went for $1.7 million.”

While home owners may not make the windfalls they were hoping for, the decision to defer the changes until July 2019 would ultimately push up property prices, said Chris Johnson, chief of developer lobby group of Urban Taskforce Australia.

“This will slow down the supply of new homes and the end product of that will start pushing housing prices back up again,” he said.

Property Council of NSW executive director Jane Fitzgerald said putting supply on hold would worsen affordability.

“Sydneysiders are struggling to buy unaffordable homes and we know that increasing supply is the key to addressing that problem,” she said.

BIS Oxford Economics Angie Zigomanis believed there was enough dwellings already approved or in the construction pipeline to meet demand in the short term but noted curbs to supply could lead to higher property prices down the track.