City of Launceston councillors supported a subdivision specific area plan to be exhibited at a council meeting Thursday.
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An amendment to the Tasmanian Planning Scheme - Launceston must be made for the development to go ahead in the Relbia area, a semi-rural locale.
Councillor Tim Walker who seconded the motion said this was the council looking to the future of its region.
"People wanting to find land to build [on] is increasing," he said.
"We're not wanting to endlessly stretch our suburban boundaries in every direction."
This new Relbia Subdivision Specific Area Plan would replace the Relbia and Glenwood Road Specific Area Plan.
By rezoning the area, it would reduce the minimum size for subdivisions so more lots could be placed. The amendment would allow for the inclusion of a further 157 dwellings.
Relbia had been identified as a place for future greater Launceston development so the council can plan strategic residential development.
READ MORE: March was a month of progress for councils
Councillor Alan Harris said this was the beginning of the process to change the zoning to allow certain size blocks in the Relbia area.
"It has been subject to lots of community consultation," Cr Harris said.
"If we say yes to this, then it's still open to further community consultation."
CoreLogic released its Quarterly Rental Review for the first quarter of this year and it found the rental vacancy rate had increased to 1.9 per cent in Launceston and Tasmania's North-East.
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