The site of the former exercise facility changed hands in 2019 for $420,000 but with Wagga's housing market boom, the 2021 sale is likely to go for far higher.

The courts have been approved for a development which would allow them to be transformed into a 16-person boarding house site. The initial application proposed four buildings, each with four self-contained units that include an ensuite and kitchenette.

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The development application was sought and approved for the site by the latest owner, who is now selling with the lucrative approval included.

Fitzpatricks' Geoff Seymour, who is managing the sale by tender, said the proposed development is timed perfectly to meet the needs of Wagga's current housing shortage.

"Really, have we seen this sort of development in Wagga before? Not to this density, it is pushing some new boundaries," he said.

"Is it warranted? Yes, we have a shortage of housing and it is in proximity to facilities and some are disability accessible."

Wagga's rental vacancies are sitting at 0.7 per cent according to the latest data from the Real Estate Institute with plenty of residents simply unable to find a home in a historically tight market.

Town planners say more high-density housing in appropriate areas that are in the CBD or in proximity to facilities like shops will be needed to meet the demands of a rapidly growing population in Wagga.

Mr Seymour said the approval of this development at this site, located next to an IGA, is a sign of changing needs in Wagga.

"I would have said two or three years ago that Wagga was not ready for this kind of development," he said. "We are attached to our 3 or 4 bedroom home with a hills hoist."

"Is this a sign of things changing? Yes, it is."

While the approved development is included, Mr Seymour said buyers can choose not to use it and to do whatever they like with the site which was holds a B2 neighbourhood centre classification that allows a range of developments.

"You don't need to do the development approved, it could be a childcare centre for example the zoning is pretty open and pretty broad, there is opportunity for a lot of different businesses," he said.

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