Aug 23, 2025
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Subdividing Land in Melbourne for Townhouses: What You Need to Know in 2025
Subdividing land for townhouse development is a popular strategy among Melbourne property investors and developers. With demand growing for medium-density housing in infill suburbs, it’s critical to understand how the subdivision process works, especially as planning frameworks shift heading into 2025.
This guide by Gidaya Group explores the key requirements, zoning laws, and risks involved in subdividing land for townhouse development in Melbourne.
What Does Subdividing Land Mean?
Subdivision is the process of legally splitting one parcel of land into two or more lots. These can then be sold individually or developed separately.
In the context of townhouse development, subdivision often occurs:
Before construction (known as a staged subdivision)
After construction, where titles are issued post-build
The choice depends on your financing strategy, builder requirements, and council regulations.
Key Steps to Subdivide Land for Townhouses in Melbourne
Feasibility Assessment
Does the zoning allow subdivision?
Is the lot size large enough?
Are there overlays (heritage, vegetation, flood, bushfire)?
Town Planning Advice
Gidaya Group’s team can engage with planners early to gauge approval likelihood.Site Survey and Design
Licensed land surveyor prepares a subdivision plan
Architectural plans for the townhouses are aligned with subdivision layout
Permit Application
Lodged with your local Melbourne council
Assessed under the Planning and Environment Act 1987
Referral Authorities Review
Water, sewerage, electricity, and other services must approve subdivision readinessStatement of Compliance & Lodgement
Council issues a Statement of Compliance
Plan of Subdivision lodged with Land Use Victoria
Minimum Land Requirements for Townhouse Subdivision
There is no one-size-fits-all rule, but as a general benchmark in 2025:
Minimum block size: 600–700m² (to fit 2+ dwellings comfortably)
Frontage width: 15m+ often required for side-by-side townhouses
Private open space: Minimum of 25–40m² per dwelling
Check the local planning scheme to confirm.
Zoning Considerations
Melbourne's planning schemes influence subdivision feasibility through zones such as:
General Residential Zone (GRZ)
Residential Growth Zone (RGZ)
Neighbourhood Residential Zone (NRZ)
These affect maximum building height, dwelling density, and permit requirements. Gidaya Group assesses zoning compliance in our due diligence process.
Common Risks When Subdividing for Townhouses
Planning delays from incomplete applications
Neighbour objections causing VCAT appeals
Hidden infrastructure costs (e.g. sewer connections)
Overlays that trigger mandatory design changes
Valuation issues for financing staged subdivision
This is why a builder-developer partner like Gidaya Group is critical. We manage risks end-to-end.
Can You Subdivide a Corner Block for Townhouses?
Yes, corner blocks are ideal for side-by-side townhouse development because:
Dual frontage reduces shared driveways
More flexible design options
Easier planning approval in some councils
However, corner lots may face greater street setback or fencing requirements.
What Are the Costs of Subdividing Land in Melbourne?
Subdivision costs in 2025 vary by suburb and complexity but typically include:
Item | Estimated Cost (AUD) |
|---|---|
Town planning application | $2,000–$5,000 |
Land surveyor | $3,000–$5,500 |
Council application fees | $1,500–$3,000 |
Service connections | $8,000–$15,000 |
Legal / conveyancing | $2,000–$4,000 |
Final subdivision cost for a typical 2-townhouse site: $20,000–$35,000 (excluding build).
Financing Considerations
Subdivision finance may require pre-sales
Banks favour titled land (post-subdivision)
Valuers will assess end resale of townhouses, not just land value
Speak to your mortgage broker early about options.
How Gidaya Group Streamlines the Subdivision Process
We manage all key stages for townhouse developers:
Site selection and zoning checks
Design for subdivision compliance
Engagement with surveyors and town planners
Submission and tracking of council approvals
Integration with our fixed-price build contracts
This reduces friction, saves time, and protects ROI.
Final Thoughts
Subdividing land to build townhouses in Melbourne is a rewarding but complex process.
With the right advice, zoning knowledge, and a builder-partner like Gidaya Group, you can transform underutilised land into profitable townhouse developments.
We offer subdivision-ready packages or manage the full journey for you — from site to sold.
Thinking of subdividing your Melbourne property? Book a no-obligation site consultation with Gidaya Group.
