Green’s Dictionary of Slang

(Aus./N.Z.) a dormitory suburb, mainly populated by families with young babies.

1959		Kensington Post 27 Mar. 6/2: Sir Humfrey spoke of the young people in the new towns. ‘The age of the average member of the working public in Basildon is just over 24 years against 36 years in the United Kingdom generally.’ The birth rate was correspondingly high. One street had been nicknamed ‘Nappy Valley’ and there was a roaring business for prams.
1972		A. Mitchell Half-gallon Quarter-acre Pavlova Paradise 38: In the isolation ward of the Hutt Valley and its satellites such as Wainuiomata (or Nappy Valley as the locals have it).
1986		Salient (Wellington) 6 Oct. 7: Known as Nappy Valley during the ’60s, Wainui preceeded Porirua as the haven of young couples who could just scrape up mortgage deposits [DNZE].
1999		NSW Registry of Births, Deaths & Marriages 🌐 But in this typical ‘nappy valley’ suburb, things are changing. The Bares and many of their generation of young married twentysomethings [...] have decided to put off starting a family for several years.
2001		Happy Valley School (Adelaide) 17–18 Oct. 🌐 In the eighties this suburb was nicknamed ‘Nappy Valley’ because of the enormous number of young families in the area.