NSW govt backtracks on housing density

The NSW government has backtracked on plans to increase housing development in parts of Sydney with one local council thankful the coalition has moved to end "the madness".

Planning Minister Anthony Roberts has told the City of Ryde and Canterbury-Bankstown Council that the government is deferring the implementation of a new medium-density housing code until July 2019.

"There's been a huge amount of overseas capital that has landed all of a sudden in Sydney ... that has brought on a lot of these dwellings maybe sooner than we normally would have seen," Mr Roberts told Fairfax on Wednesday.

"It's just enabling infrastructure in certain areas to catch up and also for us to take a bit of a breath."

Canterbury-Bankstown Mayor Khal Asfour said it was a victory for his council.

"It was clear the government hadn't thought through the potential ramifications of this policy on areas like Canterbury-Bankstown," Mr Asfour said in a statement.

"I'm happy and relieved sanity prevailed in the end and the minister ended such madness."