Chief Minister Andrew Barr has challenged the idea 120 square metres is too small for a home, saying it's "enormous" for two people.
"I live in a 120-square-metre house, an extended ex-govvie in Dickson and there's two of us and one very large cat," he told attendees at a Property Council of Australia event.
"We don't need that 250-square-metre house."
Mr Barr was responding to questions around the ACT government's new RZ1 dual occupancy policy.
Under the rules, a second, separately titled dwelling will be allowed on any block of more than 800 square metres in an RZ1 zone.
But the new dwelling must not exceed 120 square metres, a size likened to a granny flat during the property industry lunch.
In response to questions about the size limit, Mr Barr said he wanted to "contest the idea that 120 square metres is a granny flat" and said it was larger than most two- or three-bedroom apartments.
"That's enormous," he said.
"At four to five thousand dollars per square metre to construct, how is a 250-square-metre house going to be affordable for anyone who has affordability challenges?"
Mr Barr went on to say the policy was designed for downsizers and to offer first home buyers more choice.
"If we just go on building the biggest houses in the world we're not going to improve housing affordability," he said.
Building industry figures have previously criticised the size limit, saying it could deter people from taking up the initiative.
Developer licensing was also among the issues raised at the event, with the Property Council's ACT executive director Shane Martin confirming the group did not support the legislation "in its current form".
Mr Barr acknowledged the concerns raised by the industry, telling the audience "you are being well represented in those discussions by your peak body".
Ultimately he said it was appropriate for the development industry to have "a degree of standards".
"I think from a reputational perspective, it is definitely in the interests of the property development sector to have [licensing] in place," he said.
MORE PROPERTY NEWS:
Mr Barr said the government was committed to delivering the developer licensing laws in this parliamentary term.
The licensing scheme was thrust back in the spotlight after Australian Securities and Investments Commission banned a Canberra developer from managing companies for two years.
ACT Sustainable Building and Construction Minister Rebecca Vassarotti told The Canberra Times legislation to introduce developer licensing was on track to be tabled in the ACT Legislative Assembly before the end of the year.
We've made it a whole lot easier for you to have your say. Our new comment platform requires only one log-in to access articles and to join the discussion on The Canberra Times website. Find out how to register so you can enjoy civil, friendly and engaging discussions. See our moderation policy here.
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:
Sign up for our newsletter to stay up to date.