Instead, the need for more housing could be largely met through higher-density redevelopment and using land already rezoned.
However, significant work will be needed in the next decade to replace and upgrade water, wastewater and stormwater pipes and upgrade water and wastewater treatment plants.
A shortage of industrial land will also need to be dealt with.
A draft future development strategy for the city was released this morning, showing where and how the city might grow or redevelop.
The strategy keeps faith with a vision for a compact city with sound transport networks, as well as protecting the environment and adjusting to the threat of natural hazards.
It is expected Dunedin will need to have room for 540 new homes a year for the next three years, before demand levels off.
The city is projected to have a population increase of 13,500 people in the next 30 years and it needs capacity for 6550 new homes over the three decades.
A mix of housing types would be needed, partly to meet the needs of an ageing population, the draft strategy said.
Dunedin Mayor Jules Radich said a clear direction had been mapped out for growth.
"We face challenges as a city, but we also have rich opportunities to create a city that works well for residents," Mr Radich said.
The strategy was a joint project between the city council and the Otago Regional Council, and values of mana whenua were central, he said.
"It will also ensure we grow in the right places to protect highly productive land and indigenous biodiversity, and to avoid the impacts of natural hazards and climate change," she said.
"Growth is not just about adding more buildings — it’s about respecting and restoring our natural and built environments and increasing our access to outdoor spaces."
Just over half of new housing built in Dunedin in the past five years was within the main urban area, which the strategy defined as including the land and hills surrounding the Otago Harbour, from Green Island and Fairfield in the southwest, extending to Ravensbourne at West Harbour and to The Cove on the Otago Peninsula.
This was projected to shift to 59% in the next 30 years.
Mosgiel had experienced rapid housing growth in the past decade and high demand for homes there was expected to continue.
Parts of the city could be developed after wastewater infrastructure minimum standards are met and there is agreement on how to fund transport upgrades.
They include Kaikorai Valley, Helensburgh, Balmacewen, North East Valley, Pine Hill, Ravensbourne and Corstorphine.
Areas proposed for future residential intensification include Wakari, Kaikorai, Brockville, Concord, Corstorphine and Andersons Bay.
Public consultation on the draft future development strategy runs until the end of next month.
