What makes a good development site

One of the biggest factors in whether a development project turns a good profit is the site itself. Even the best design can’t overcome a block that simply doesn’t stack up. Development involves huge costs, so choosing the right site at the start can make all the difference.

Below, I’ll walk through the key things I look at when assessing whether a site is suitable for development.

Planning Zones: The First and Most Important Check

The first thing I always check is the planning zone. It’s amazing how often people come to me with a site and a number of dwellings already in mind, yet they don’t even know what zone their property is in.

Without knowing the zone, it’s impossible to work out potential yield numbers.

Tools like Landchecker are excellent for this — even the free version gives you zoning and overlay information. State government websites such as Land Vic also provide free resources.

General Residential Zone (GRZ)

The GRZ is the most common zone covering suburban residential areas. A few years ago, a new minimum garden area requirement was introduced. This is now the biggest limitation on how many dwellings can fit on a GRZ site. Development is possible, but it often requires a larger block to work financially.

Residential Growth Zone (RGZ)

The RGZ is one zone where councils actively encourage infill development. These areas usually sit near major commercial areas. They are more desirable (and more expensive), but allow for higher yields and greater support from council. This is when I get excited about a site.

In short: GRZ = harder, larger sites needed. RGZ = easier, higher yield, more support.

There are many other Zones applicable to land, but these are the most common residential ones.

An example of various zones all in close proximity

Overlays: The Extra Layer of Rules

The next thing I check is whether there are any planning overlays. These are additional controls that can relate to heritage, vegetation, flooding, bushfire, and more.

Some overlays are minor inconveniences, others are deal-breakers. As a rule of thumb:

• No overlays = great news.

• Multiple overlays = more cost and complexity.

Services: What’s Underground Matters

Before going too far, I also check underground services to assess where sewer, stormwater, and other assets run in relation to the property.

Easements often follow these services, and they eat into valuable space. A diagonal easement across a site can kill a project. Even without easements, knowing how services will connect to new dwellings is a practical step that saves headaches later.

Site Area, Shape, and Location

After zoning, the site’s size and shape are the next biggest factors.

• Corner sites are ideal: they allow easier vehicle access and better layouts.

• Narrow, deep sites can be problematic: long driveways chew up space and money.

• Bigger sites naturally give more flexibility, but setbacks, private open space, and site coverage rules all eat into the usable area.

  
  

Orientation also matters. North-facing backyards are a big advantage, while poor solar access may force bigger setbacks to achieve minimum daylight requirements.

Neighbouring Properties

Neighbours affect your site more than you might think.

• Street setbacks: Your site often needs to align with existing neighbours.

• Boundary proximity: If neighbours are very close, double-storey designs need careful overshadowing and overlooking considerations.

• Backyards: If adjoining properties have small backyards, your design options shrink.

  
  

In other words: a site doesn’t exist in isolation — the context matters.

What is existing around your site has a big influence on your outcome

What Makes a Bad Site?

Sometimes it’s easier to identify a bad site than a good one. Red flags include:

• Zoning restrictions such as NRZ (Neighbourhood Residential Zone) or even GRZ on small blocks.

• Title covenants allowing only a single dwelling.

• Narrow, elongated blocks requiring long driveways.

• Site area under ~600 sqm (with some exceptions like RGZ corner sites).

• Neighbours with deep front setbacks or tiny backyards tight against your boundary.

• Large or diagonal easements eating into usable land.

Why Due Diligence Matters

Experienced developers do their due diligence before they buy. They know that a viable development site requires more than just block size — you need to account for driveways, setbacks, backyards, permeability, site coverage, and the ever-changing planning rules.

That’s why it’s so surprising when people purchase a property for development without even knowing the planning zone.

Final Thoughts

Every site is different. Regulations shift, neighbours change the equation, and councils interpret rules differently. The best way to avoid costly mistakes is to do your homework before you commit.

If you’re serious, commissioning a feasibility report can give you a clear picture of what’s possible before you invest. It’s a small cost compared to the risk of buying a site that simply doesn’t stack up. Hiring the right people from the get go will save you so much more money in the long run.

At the very least, if you’re reading this, you’re already ahead of the game by putting in the research.