The NSW government says the streets within 400 metres of Booragul and Teralba rail stations can accommodate a total of 14,000 dwellings over the next 15 years, projections the Property Council says are "highly unlikely to be achieved".
The government has published figures showing the housing capacity for 23 precincts in Sydney, Newcastle and the Illawarra over the next 15 years under its Transport Oriented Development program.
In Newcastle and Lake Macquarie, the numbers suggest Booragul can accommodate 7063 new dwellings, Teralba 6697, Cardiff 6139, Kotara 5364, Adamstown 5153, Hamilton 4822, Morisset 3539 and Newcastle Interchange 2808.
Booragul, Teralba and Cardiff have the highest capacity of any individual stations under the TOD program, according to the published figures.
Property Council of Australia Hunter and Central Coast director Amy De Lore said the growth figures were "ambitious but highly unlikely to be achieved".
"Two big barriers are low development feasibility and lack of supporting infrastructure," she said.
"Infill development in the Hunter and Central Coast has become completely unviable since pre-COVID times due to the economic downturn, construction cost hikes and rising government charges."
Lake Macquarie City Council director of development, planning and regulation, David Antcliff, said the numbers "appear unrealistic".
"How the NSW government's figures have been established is unknown to council," he said.
"Given the rate of redevelopment in these areas, council staff believe it is very unlikely that the NSW government numbers will be achieved in 15 years.
"However, it is difficult to accurately estimate the number of homes that would or could be built in any given period because of the many influencing factors."
The government has launched a series of measures across greater Sydney as it chases a five-year target of 377,000 new homes under the National Housing Accord.
The TOD program allows for six- to eight-storey apartment buildings within 400 metres of the eight Newcastle and Lake Macquarie stations. Cockle Creek will join the program next year.
The Australian Bureau of Statistics reported last month that dwelling completions had fallen from 11,525 to 10,776 in NSW over the March quarter while commencements had dropped from 11,361 to 8961, the worst result since June 2012.
Ms De Lore said building approvals, starts and completions were "down significantly on where they need to be".
"Project risks are too high and finance is difficult to secure," she said.
The Urban Development Institute of Australia published research in June which said a typical new two-bedroom flat in the nine Newcastle suburbs covered by the TOD program would need to fetch more than $1.15 million to be viable, 53 per cent higher than the average market price.
Teralba, Booragul, Kotara and Adamstown stations have train services only once an hour to Newcastle on weekdays because they are not stops on the Sydney to Newcastle express service.
Opposition planning spokesman Scott Farlow was quoted in the Sydney Morning Herald this week saying the growth numbers were "pie in the sky" and singling out the Booragul projection.
"The government expects 7063 dwellings to be built around a station with no shops where they have two peak services to Newcastle Interchange and one two-and-a-half-hour service to Central," he said.
Ms De Lore said the Lake Macquarie stations would need "significant upgrades" to handle higher usage, including lifts, toilets, ticketing facilities and platform extensions.
"There is no dedicated infrastructure funding steam attached to the tier-two TOD stations," she said.
A City of Newcastle spokesperson said the council was confident of reaching the state's five-year housing target of 11,100 new homes in the local government area.
"What City of Newcastle, of course, can't control is when, or indeed if, developers proceed with housing projects once their development applications are approved," the spokesperson said.
The UDIA published a report this week projecting just 171,000 new homes would be built across Sydney, the Hunter and Illawarra in the next five years, 150,000 short of the housing accord target.
The analysis was based on a survey of developer intentions, CoreLogic's Cordell construction database and the Department of Planning's Sydney housing supply forecast.
The report found 27 per cent of all Lower Hunter land zoned for housing was "constrained" by environmental and infrastructure factors, the highest proportion of any region in the analysis.
About 12 per cent of all residential land was both vacant and unconstrained.
