Sydney's housing future will mirror its past, in a vision outlined by the state's planning minister on Friday.

The inner-city terrace, a style that became synonymous with Sydney's poor in the mid-19th century, will be spread through the outer suburbs, in a proposal released on Friday. Experts have praised the model but warned it could lead to uncomfortably close contact with neighbours.

Classic terrace houses in Sydney's Surry Hills could be the future of outer-suburban living. Credit:Peter Rae

Sydney needs more than 600,000 new dwellings in the next 15 years. The government believes meeting that target will require giving more attention to the middle ground between the high-density apartment block and the detached home.

"We must provide quality, sustainable and affordable housing," said planning minister Rob Stokes. "Terraces and villas are more energy efficient [... and] also offer more variety and flexibility."