While is well known that development is booming in the northern suburbs of Boorooma, Estella and Gobbagombalin, Fitzpatricks Real Estate director Shaun Lowry said there were still many buyers searching for homes on the south side of Wagga.

For this reason, Mr Lowry said the proposed 150-home estate bounded by Silverwood, Birch, Brunskill and Mitchell roads at Lake Albert was "very appealing".

Plans for the new estate come as the agent said Fitzpatricks was continually fielding inquiries from people searching for a bigger blocks of land, which are in short supply.

"There is definitely a need for blocks of that size in the southern area of the city," Mr Lowry said.

He said young families and older retirees were wanting to build sheds without compromising on yard space.

"We all like a bit of space ... it gives people more area and more distance between neighbours, a bit more privacy even," he said.

One of the estate's landowners, Des Lane, said the proposal presented a unique opportunity to transform an "under-utilised, unkempt area" surrounded by nice properties into much-needed housing options for a city determined to reach a population of 100,000 residents.

Although the state's planning authority has given approval to reduce the minimum lot sizes with conditions, Mr Lane said there were still a few more hurdles to overcome before any soil could be turned on the project.

It is expected the proposal will be released by Wagga City Council for public exhibition in the coming months before it could be signed off officially by both the state and council.

Mr Lane said there was "absolutely" a strong demand for lifestyle blocks in the suburb and across the city.

He said it was already well serviced by recreational areas like Rawlings Park, as well as the Lake Albert village, existing schools, daycare centres and health and fitness facilities.

"There is a major shortage of housing opportunities in Wagga. We thought this area was well-positioned to fill that void baring in mind that where it is, is only a stone's throw to an entire shopping centre," he said.

Mr Lane added that the estate could see up to 500 new residents living in Lake Albert, which could bring "enormous" benefits to existing neighbourhood businesses.

"I would expect they will be looking forward to the soil being turned over in the next 12 to 18 months," he said.

"It brings the business to their doors."