The state government has unveiled new guidelines to provide owners of rural real estate around Sydney and New South Wales options to develop their land.

A number of small landowners have previously been unable to build on their investment because the original subdivisions of the land did not allocate space for roads, power, drainage, services and energy - all factors that comprise a legitimate development.

State minister for planning and infrastructure Brad Hazzard explained that there are about 10,000 of these properties available across the state, some of which can cater for NSW's growing population.

"The New South Wales government has acted to resolve the future use of these lots by establishing a process to enable the landowners - some of whom have owned this land for generations - to finally build a home or sell their land," he said.

"It would involve a Subdivision Authority (for example UrbanGrowth NSW, a council, etcetera) proposing a Development Plan based on modern, redrawn boundaries."

Riverstone in Sydney's north-west "growth centre" is the first site to benefit from the agenda, having already been earmarked for residential use.

Up to 1,600 low-density residential dwellings could be derived from the lots of land.

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