Hi everyone, Often hear a lot about buying a house in middle/outer ring suburbs with potential of rezoning, preferably from low density to medium to high density dwelling zone. However, this article I just read https://www.rba.gov.au/publicatio…/…/2018/pdf/rdp2018-03.pdf says that when a neighborhood has a high amount of medium to high density dwellings (such as Townhouse and Unit), this will keep a lid on the growth of land and house price. (compared to nearby suburbs with similar fundamental). This is because more people can pay less for "the right to live in the suburb". Even house is always desirable, they are at least given other affordable choices of dwelling. And this will affect rental and sales market. My understanding is: *Immediate effect* of rezoning - when the area is just rezoned to higher density area, the land and house price can experience a decent growth, that is because the land can now have a higher potential rental income, when the rezoning open up possibilities for things like development, subdivision, demolish and conversion (to townhouse or apartment), granny flat, dual occupancy. **But in long run** - when the place is totally transformed into a congested neighbourhood full of NEW townhouse and apartment (or NEW small house), the house/land value growth will start hitting a plateau for a long time, due to the following reasons: For house buyers, they would walk away because the ideal house they prefer should be in a quiet and spacious neighbourhood, without neighbours' peeking. For renters, they might find the house cannot offer the level of privacy it should has, when the house is surrounded many medium density dwellings. So why bother to pay a premium of rent when there are plenty of afforable townhouse. In conclusion: only buy somewhere with potential of rezoning. But when that place has been rezoned and "redeveloped" for a long time, and seen a surge in middle - higher density dwelling supply, be careful! Is this understanding flawed or biased? Appreciate any thoughts.