Subdivision Simplified – Turning One Block into Two

Subdivision is one of the most effective ways to unlock value in a property — whether you're creating a second lot to sell, planning a dual-occupancy build, or looking to maximise long-term equity.

But while the concept feels straightforward, the process involves detailed council requirements, site assessments, service upgrades and precise planning.

In the Illawarra, opportunities vary significantly depending on zoning, minimum lot size, topography, overlays and Access. Understanding these factors upfront is essential to avoid costly surprises.

This guide breaks down the fundamentals: what councils look for, how the process works, and what you need to consider before committing to a "subdividable" block.

1. Start With Feasibility: What Makes a Block Subdividable?

Before you think about design or construction, the first stage is feasibility — assessing whether the block can legally and practically be split into two.

1. Zoning (R2, R3 and Beyond)

Most residential blocks in Wollongong, Shellharbour and Kiama fall into:

• R2 Low-Density Residential

• R3 Medium Density Residential

• E zones near the escarpment

Each zoning category dictates what you can and can't do, including:

• minimum lot sizes

• building envelopes

• driveway and Access requirements

• dual-occupancy allowances

• permissible density

Example: A 700sqm block in Woonona may look subdividable, but if zoning or overlays restrict the minimum lot size, the project may not pass council assessment.

2. Minimum Lot Size (MLS)

Each council sets its own MLS requirements. While these vary by zone and location, typical ranges include:

• Wollongong: ~450–600sqm

• Shellharbour: ~300–500sqm

• Kiama: ~500–800sqm

Both proposed lots must meet the MLS after accounting for:

• driveway easements

• setbacks

• private open space

• natural site constraints

• infrastructure Access

Many sites fail to meet feasibility criteria because the usable area falls short once these factors are applied.

3. Site Constraints

Even if zoning and lot size allow subdivision, physical site conditions can prevent approval.

Key constraints include:

• flood overlays (common around lakes and creeks)

• bushfire zoning (northern escarpment suburbs)

• topography and slope (Austinmer, Thirroul, Bulli foothills)

• significant trees and landscaping controls

• sewer location and depth

• stormwater discharge requirements

For example, a block in Calderwood may meet MLS, but if sewer Access is 30–40 metres away or sits at the wrong depth, installation costs can escalate quickly.

4. Services and Access

Each new lot must have independent, compliant Access to:

• water

• sewer

• stormwater

• NBN or telecommunications

• electricity

Battle-axe lots also require compliant driveway widths (typically 3–4 metres). If Access requires major earthworks or retaining walls, feasibility can shift dramatically.

5. Cost Expectations

Subdivision costs commonly range from $60,000 to $180,000, depending on complexity.

Typical components include:

• surveys

• civil engineering

• DA fees

• driveway construction

• sewer connection or extension

• stormwater upgrades

• electricity/NBN pit installation

• tree removal (if permitted)

• Final council certification

Understanding the true cost range upfront protects you from overpaying for a site that isn't viable.

2. The Council Process: Step-by-Step From Concept to Approval

Subdivision in the Illawarra generally follows a defined process. While timelines vary, the sequence remains consistent.

Step 1 — Preliminary Feasibility

Your first step should always be a planning assessment that reviews:

• zoning

• minimum lot size

• overlays (flood, bushfire, ecological)

• slope and natural features

• sewer and stormwater availability

• Access options

• potential engineering challenges

This step determines whether the block can be subdivided and what constraints you need to plan around.

Step 2 — Survey and Concept Plan

A licensed surveyor completes a detailed site survey, capturing:

• boundaries

• existing structures

• ground levels

• sewer and stormwater locations

• vegetation

• easements

From here, a preliminary concept plan is prepared to show how the land can be divided while complying with council rules.

Step 3 — Development Application (DA) or CDC

Most subdivisions require a DA. However, straightforward two-lot subdivisions may qualify for a CDC (Complying Development Certificate) if they meet the relevant requirements.

A DA typically includes:

• subdivision plan

• stormwater and civil engineering design

• Access/driveway plan

• waste and servicing details

• bushfire/flood reports (if applicable)

Assessment time:

• ~6–12 weeks for straightforward applications

• longer if additional reports or amendments are required

Step 4 — Construction & Service Installation

Once approved, construction begins.

This might include:

• driveway installation

• stormwater and sewer works

• new electrical/NBN pits

• retaining walls

• tree removal or landscaping

• fencing adjustments

This is where most of the expenditure occurs, so accurate upfront quoting is crucial.

Step 5 — Subdivision Certificate & Plan Registration

After works are completed and inspected, the council issues a Subdivision Certificate. Your surveyor then lodges the plan with NSW Land Registry Services to create two separate titles.

You can now:

• sell one or both lots

• build a second dwelling

• refinance against the new value

• hold for long-term growth

3. What Makes a Good Subdivision Site in the Illawarra?

While every site needs to pass feasibility, specific characteristics give you the best chance of a smooth, cost-effective subdivision.

1. Flat or Gently Sloping Land

Minimises drainage issues, retaining walls and Access construction costs.

2. Wide Frontage

Creates flexibility for driveways and Access — particularly for battle-axe designs.

3. Accessible Sewer and Stormwater

Sites with deep, accessible sewer mains or kerbside stormwater typically cost less to service.

4. Minimal Environmental or Vegetation Constraints

Protected trees or significant landscapes can increase cost or prevent approval.

5. Strong Local Demand

Subdivision works best in areas with:

• high owner-occupier demand

• reliable rental markets

• limited land supply

Illawarra examples include:

• Albion Park & Calderwood: wide blocks, modern services

• Dapto & Horsley: larger, older blocks with level land

• Kanahooka & Lake Heights: value-add potential

• Select Woonona/Bulli pockets: premium but tightly constrained

Every suburb has micro-markets — a buyer's agent with local insight can identify which blocks genuinely hold long-term potential.

Thinking About Subdividing in the Illawarra?

Subdivision can unlock value — but only if the block, zoning and numbers stack up from day one.

A professional assessment early in the process is the simplest way to avoid expensive missteps and ensure your strategy aligns with your long-term goals.

At The Shoreline Agency, we help buyers:

• analyse subdivision feasibility

• understand zoning and overlays

• estimate realistic costs and timelines

• Compare on-market and off-market opportunities.

• Buy with clarity and confidence

📞 Contact The Shoreline Agency to discuss your subdivision goals or request a site feasibility review.📧 joel@theshorelineagency.com.au

See you on the Shoreline.