A development application to build 27 townhouses in Georgetown, worth an estimated $1 million each, has been lodged with Newcastle City Council.
Stirling Property Group submitted a $10-million application to subdivide and develop the 12,000-square-metre site on Austin Street, which is bound by the rail corridor and the industrial estate.
The three-bedroom two-storey townhouses will sit on lots ranging in size from 222 to 383sqm.
The development application indicated each dwelling is expected to fetch $1 million, with an estimated rent of $898 a week.
Although the townhouses will be more than $275,000 more than the postcode's mean house value, planning documents argue the proposed dwellings will command the higher price, as they will be new houses in a central location.
"The proposed dwellings may reasonably be expected to attract a price premium over the value of the majority of comparable rental stock and some proportion of owner-occupied housing stock," the documents stated.
"In terms of price, the proposed dwellings will not contribute to reducing prices, in the context of current mean and median prices in the area.
"However, an increase in supply is generally interpreted as having positive implications for access and affordability."
The DA also noted the estate was an infill development, which both state and local governments are strongly advocating for, in an area where limited sites were suitable for such projects.
Nearby residences had expected the property to be developed for some time and are generally supportive, with some concerns around the additional demand for on-street parking and increased traffic,
However a traffic report indicated the development would increase the number of vehicles in the suburb by 46, and the proposal would cater for a total of 45 parking spaces.
The report also found the traffic in the suburb would increase about seven per cent, or 46 two-way trips - if all the development's residents were employed.
"The proportional increases are small in the contexts of the suburb and local government area in which the development site is situated," the report stated.
"The report concludes that the local road network has capacity to absorb the additional movements."
Neighbours also indicated the development would eliminate "some illegal and other undesirable activity" that occurs on the site from time to time.
One resident said recently a "vehicle was driven at speed through Austin Street into the site and then set alight".
If approved, the development's construction will be divided into two stages.
