councils, are they flexible ?

I own a property that is a 1940's build on a 580sqm block. It is 3 bed,2 bath, lounge,dining,big kitchen, big front garden, etc.
What I would like to do is knock it down and build 2 small homes, both with a street front appeal.
1/2 bed, kitchen/dining and lounge, single level.
I'm really sick of living in a house that is twice the size I need with a garden that annoys me.
I don't need a separate dining, 3rd bedroom, 2nd bathroom, huge laundry, 3rd loo, etc etc
these days a lot of the new areas are offering blocks that are 190-300sqm, which seems ideal, however, I like my area and don't want to move out.
has anybody had success convincing the local council to allow something like this ?