In Sydney the problem is lack of affordable housing, and the stuff that is isn't very nice. What if a new development was build containing smaller units, 30-40sqm to be more affordable.
In Australia, big banks won't secure a mortgage on a unit that is less than 50sqm. Some of the alternate lenders allow this though, a building with small studio style apartments would go great here, on newer developments they're focused a lot on lifestyle. With the small units you could build a very social building and people would want to live there. Studios are much cheaper than 1 bedroom apartments, easier to maintain and if the idea is that you're more social then you don't need all that extra space.