Three years ago, an overhaul of planning rules in Victoria prompted fears on the part of many in the property sector that significant swathes of Melbourne’s inner and middle suburbs would be effectively locked up from the viewpoint of residential development.

Introduced in 2013, the changes saw the abolition of the former Residential 1, Residential 2 and Residential 3 zones along with the introduction of three new zones. The most restrictive of these, known as the neighbourhood residential zone (NRZ), is intended to apply to areas identified for urban preservation and…