Dual Occupancy vs Townhouse Development in Melbourne: Which is Better in 2025?

In Melbourne’s dynamic property landscape, developers and homeowners alike are weighing the pros and cons of dual occupancy versus townhouse development. With land tightening and council planning evolving, which strategy offers the best return — and what’s more practical in 2025?

Gidaya Group breaks down both options to help you make the right decision for your land, lifestyle, or investment goals.

What’s the Difference Between Dual Occupancy and Townhouses?

• Dual Occupancy: Two dwellings on a single lot. Can be side-by-side or front-back configurations. Titles can be shared or split.

• Townhouses: Typically 2+ attached dwellings, each on its own title, usually part of a larger subdivision with shared walls.

Both allow you to maximise land, but their build structures, permit pathways, and market appeal differ.

Planning Differences: What Councils Prefer in 2025

In 2025, local councils continue to favour dual occupancy in low-density zones, particularly in:

• General Residential Zones (GRZ)

• Neighbourhood Residential Zones (NRZ)

Townhouse developments may trigger higher scrutiny in these zones. But in RGZ (Residential Growth Zones) or transitional corridors, townhouse clusters may be more welcomed.

Gidaya Group works with councils across Melbourne and understands how to position your project for approval.

Build Costs & ROI: Side-by-Side Comparison

Note: Dual occupancy builds can avoid shared walls, potentially commanding better individual resale values.

Pros & Cons

Dual Occupancy Pros:

• Easier planning pathways (in most residential zones)

• Standalone dwellings = better resale individuality

• Greater design flexibility (single vs double storey)

• Can be staged more easily

Dual Occupancy Cons:

• Lower density potential (often capped at 2 units)

• Larger land requirement per dwelling

Townhouse Pros:

• Higher yield from same lot (2–4 units possible)

• Efficient use of space

• Lower per-unit land cost

• Appealing to first-home buyers & downsizers

Townhouse Cons:

• More complex permit processes

• May require demolition + infrastructure upgrades

• Shared walls = less buyer individuality

Which Option Is Right for You in 2025?

It depends on:

• Your lot size & frontage

• Council zoning & overlays

• Your risk appetite (permits, delays)

• Cash flow + investment goals

At Gidaya Group, we offer free feasibility consultations to determine the best development strategy for your site — backed by council insights, builder pricing, and future ROI modelling.

Suburbs Where Dual Occupancy Shines in 2025

• Glen Waverley

• Vermont South

• Doncaster

• Malvern East

• Wantirna

These suburbs offer:

• Large legacy lots

• Planning flexibility

• Buyer demand for low-density housing

FAQs

Q: Can I convert an existing house into a dual occupancy?
Yes — subject to zoning and title. You may need to demolish or extend.

Q: Which builds faster: townhouse or dual occupancy?
Dual occupancy often has simpler staging and approvals.

Q: Which has better resale?
Depends on design, location and demand — but detached dual occupancy units often have a stronger resale value.

Final Verdict from Gidaya Group

Both options unlock land value — but dual occupancy remains a faster, lower-risk entry point in 2025 for many owners and investors.

Townhouses are powerful when density, yield, and resale value are top priorities — but success depends on careful planning and builder execution.

Gidaya Group delivers:

• In-house feasibility assessments

• Council-ready design plans

• Full turnkey construction + compliance

• Ongoing support until final occupancy