Market demand estimates have Wangaratta requiring only two thirds of the new housing that the state government has projected by 2051, according to council figures.

Currently there are 85 to 150 new dwellings being built each year to keep up with demand, and with multiple housing estates already approved, Wangaratta's urban fringe is set to grow over the coming years.

However, the state government's housing target has 6000 new dwellings being built over the next 25 years, while Rural City of Wangaratta director of sustainability & culture Stephen Swart said this is more than the current demand estimate of 4000 new lots by 2051.

"Of course we will work towards achieving the state government's housing target but the demand based on the estimate we have isn't there for 6000 new homes by 2051," Mr Swart said.

"We support development with strategic investment in infrastructure which we continue to do in both of the north and south growth corridor areas.

"Council has also approved other residential developments outside the growth areas and an example is that council recently made a decision to support a planning application in Murdoch Road for a 127-lot subdivision and we also have supported the Clarkes Lane proposal which would be another 233 lots."

Cr Allison Winters presented figures following a conference with the Municipal Association of Victoria about the expected changing nature in this housing demand over the next decade in Wangaratta.

By 2036 the population of Wangaratta city is expected to reach just over 32,000 people, and about 34 per cent of households will be lone person occupants, 30 per cent will be couples with no children, and the rest couples with children or one parent families.

With this, council realises that varying lot sizes are important to any subdivision.

Mr Swart said council looks at making sure there is a variety of lot sizes in the market and that some of these developments have smaller lots compared to other estates.

"We have also approved a residential village (over 50s) in the north growth area and because it doesn't get subdivided into lots, sometimes those numbers are lost," he said.

"That's a product that's needed in our community and there are 227 potential dwellings there.

"It comes in the form of lot sizes but also the form of different types of development."

Beyond the city's growth areas, there's potential development that's occurring centrally, and even a few apartment proposals have been made in recent years in central Wangaratta.

Mr Swart said this is an illustration that there's a need for different products in the market, and although council doesn't come up with the proposals, it works with landowners to make sure there are different products available in the market.

"When we get those applications, we look at lot sizes and whether it's appropriate and aligned with our planning scheme," he said.

"The other side of that spectrum is that there's also still a need in the market for your bigger lifestyle lot."

To this end, he said council looks at the structure plans and makes provisions for medium density housing potential.