Campaigners have hailed the courage of councillors after they turned down an application for 73 homes.
Breckland Council's planning committee rejected a scheme to develop land off Saham Road in Watton.
The plans had been recommended for approval by planning officers but an overwhelming majority of committee members disagreed.
Applicants Hopkins Homes argued there is a lack of a five year housing supply in the district and the plans would alleviate part of that.
Breckland leader Michael Wassell, who spoke to the committee as a ward member for Watton, said: 'You look at the estate agents and they are full.
'There are planning applications for something like 560 houses.
'There are still some new houses for sale on other sites.
'Unfortunately you have to look across the whole of Breckland but people do not live in the whole of Breckland. Watton is the most densely populated parish.'
Paul Adcock, chairman of campaign group What Watton Wants, said: 'It may come to appeal but the site has been turned down on appeal before.
'I am really, really pleased the council have had the courage to turn it down. Fear of appeal should not be a reason for approving unsuitable developments.
'Everybody accepts there has to be growth but it has to be sustainable for the community.'
The plans included an open park area as well as meeting the 40pc affordable housing target set by Breckland.
It would have been made up of 29 three-bed houses, one two-bed bungalow and 14 four-bed houses for the open market. There would have been six three-bed houses, 16 two-bed houses, three one-bed houses and four one bed apartments for the affordable housing market.
Planning committee chairman Nigel Wilkin said he feared some of the arguments for rejection put forward by the committee would be 'blown away' should the decision be appealed.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here