What Is the Minimum Lot Size for Building Townhouses in Melbourne?

What Is the Minimum Lot Size for Building Townhouses in Melbourne?

Townhouse development in Melbourne is highly influenced by local planning regulations, but there’s no universal minimum lot size that applies to every suburb. At Gidaya Group, we help clients navigate these requirements site-by-site to maximise outcomes.

If you’re considering developing townhouses in 2025, this guide outlines everything you need to know about lot size requirements — including zoning, overlays, council rules, and smart design techniques.

Does Melbourne Have a Fixed Minimum Lot Size for Townhouses?

No — there is no statewide fixed minimum lot size in Victoria for building townhouses. Instead, local councils assess each development based on:

• The number of dwellings proposed

• The design compliance with ResCode

• Site-specific constraints (e.g. slope, access)

• Whether the site is in a General Residential Zone (GRZ) or other planning zones

However, there are general land size benchmarks that developers use as guidance.

Common Land Size Benchmarks for Townhouse Development

These are practical minimum land sizes often required to accommodate 2 or more townhouses with compliant designs:

• For 2 townhouses: Minimum 500m²–600m²

• For 3 townhouses: Minimum 700m²–800m²

• For 4+ townhouses: 900m² and above, depending on site constraints

Note: These are practical minimums — not statutory. We’ve delivered compliant 2-dwelling projects on sites under 500m² with clever architectural solutions.

Council Planning Factors That Influence Minimum Lot Size

1. Zoning:

   • Most townhouse developments fall under General Residential Zone (GRZ)

   • GRZ allows multi-dwelling developments, subject to design compliance

2. Overlays:

   • Neighbourhood Character Overlays, Heritage Overlays, or Environmental Overlays may restrict density or design

   • Overlays may also influence minimum open space or setbacks

3. Site Frontage & Depth:

   • A wider street frontage (minimum ~15m) helps with vehicle access and driveway separation

   • Depth is key for creating backyards and private open space

4. Garden Area Requirements (ResCode):

   • If the site is 400m²+, a minimum percentage must be provided as garden area

     • 25% for 400–500m²

     • 30% for 501–650m²

     • 35% for >650m²

Smart Design to Maximise Smaller Sites

Gidaya Group works with architects who specialise in townhouse configurations for compact sites. Here are some of our key tactics:

• Double-storey designs to preserve ground space

• Mirror layouts to reduce duplication of circulation areas

• Shared driveway access for compact car parking solutions

• Minimum 2.1m private open space per unit to meet ResCode

• Use of internal courtyards to boost light and ventilation

With these tactics, we’ve achieved successful developments even on irregular or sloped blocks under 500m².

Can You Subdivide a Small Block to Build Townhouses?

Subdivision is possible if you can demonstrate that each resulting lot:

• Has access to services (sewer, power, stormwater)

• Complies with planning controls and open space rules

• Provides vehicle access

However, subdivision is usually done post-construction for townhouses, once each unit is built and occupancy permits are issued.

Gidaya Group can coordinate your subdivision applications and handle all dealings with council and surveyors.

Final Word: Is Your Block Big Enough?

The best way to determine if your land can support townhouses is via a preliminary site feasibility. Gidaya Group offers these assessments, providing you with:

• Development yield potential

• Design and access strategy

• Town planning risk identification

• Estimated resale value and ROI projections

Get in touch with Gidaya Group to learn if your site qualifies for townhouse development in 2025.