Subdivision Strategy: The Step-By-Step Path to Doubling Your Land Potential

TL;DR

• Successful subdivisions rely on zoning, minimum lot sizes, site constraints, services, and realistic costing—not just a big block.

• Common mistakes include: assuming the council will approve anything, ignoring sewer or stormwater constraints, misunderstanding the minimum lot size, and starting without feasibility.

• Strong Illawarra opportunities can be found in Albion Park, Dapto, Kanahooka, Calderwood, and parts of Warilla and Lake Heights.

• Costs typically range from $60K to $180K, depending on slope, services, and council requirements.

• Most subdivisions require a DA, though some simple two-lot splits may qualify under CDC (Complying Development).

• Council approval times in Wollongong, Shellharbour, and Kiama generally range from 6 to 12 weeks, with complex sites taking longer.

• Before buying, a buyer's agent can run the feasibility and save you from costly surprises.

• Book a consultation with The Shoreline Agency before committing to a "subdividable" block — it can save tens of thousands.

  
  

Here's how subdivision works in the Illawarra — simplified.

Subdivision Isn't Complicated — But It Is Technical

Subdivision appeals to Illawarra buyers because it creates flexibility:

• Build a second dwelling

• Sell the rear lot

• Retain both for long-term rental income

• Unlock equity through higher land use

  
  

While the concept is simple, the execution relies on detailed planning rules, site constraints, and council processes that determine whether a project is viable — or completely unworkable.

A calm, structured approach is the difference between a profitable project and an expensive setback.

Start With Feasibility — Not Excavators

The most common misconception is: "Big block = easy subdivision.” In reality, a site must pass four feasibility tests.

1. Confirm the Zoning First

Most Illawarra residential blocks fall under:

• Low-Density Residential

• R3 Medium Density Residential

• E4 Environmental Living (foothills/escarpment areas)

  
  

Each zone governs:

• Minimum lot sizes

• Dual-occupancy allowance

• Battle-axe driveway rules

• Allowable density

• Building envelope requirements

  
  

Example: A client in Woonona recently found a 960sqm block — but zoning restrictions meant it could not be split into two complying lots. Without zoning clarity, the project would have failed from day one.

2. Check Minimum Lot Size (MLS)

Every council applies specific minimum lot sizes. Approximate Illawarra MLS:

• Wollongong: 450–600sqm

• Shellharbour: 300–500sqm

• Kiama: 500–800sqm

  
  

A block must meet MLS after factoring in:

• Driveway width

• Setbacks

• Private open space

• Effluent disposal (if required)

• Easements

  
  

Example: A 740 sqm block in Warilla passed MLS easily — but only because the driveway didn't reduce the usable land below the threshold. A quick feasibility check saved the buyer ~$18K in redesign fees.

3. Analyse Site Constraints

Even compliant blocks can fail due to:

• Flood overlays (Towradgi, Lake Illawarra pockets)

• Bushfire zoning (Northern Escarpment suburbs)

• Slope (Thirroul, Austinmer foothills)

• Easements across the usable area

• Stormwater discharge limitations

• Significant tree protection

• Sewer lines running through the centre of the site

  
  

Example: A buyer in Calderwood had a near-perfect block — but sewer access was 45m from the proposed second lot. The quote came back at over $30K, pushing the project into unviable territory.

4. Understand the True Cost Range

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

Typical breakdown:

• Survey + concept plan: $3,000–$6,000

• DA fees: $4,000–$7,500

• Civil engineering design: $4,000–$12,000

• Driveway construction: $8,000–$20,000

• Stormwater upgrades: $10,000–$40,000

• Sewer extension or connection: $8,000–$30,000

• Electrical/NBN pits: $4,000–$10,000

• Tree removal (if permitted): $1,500–$20,000

• Registration fees: $1,000–$2,500

  
  

This honesty is crucial — many people underestimate costs by half.

The Council Process — What Actually Happens

While each council has its own nuances, the Illawarra subdivision process follows a consistent pathway.

Step 1 — Pre-Purchase or Pre-Design Feasibility

This determines:

• Zoning

• Minimum lot size

• Overlays

• Restrictions

• Service availability

• Likely costs

• Preferred access points

  
  

This step prevents the "paying for a non-subdividable block" mistake.

Step 2 — Survey & Concept Plan

A surveyor documents:

• Boundary positions

• Ground levels

• Existing structures

• Sewer/stormwater lines

• Service locations

  
  

Then, design an indicative two-lot subdivision that aligns with council rules.

Step 3 — DA Lodgement (or CDC in Limited Cases)

Most subdivisions in the Illawarra require a DA. However, some basic two-lot subdivisions may qualify for CDC (Complying Development), which can shorten assessment time.

Council usually requires:

• Subdivision plan

• Driveway/access plan

• Stormwater engineering

• Bushfire or flood reports (if applicable)

• Waste + landscape considerations

  
  

Approval timeframe:

⏱ 6–12 weeks (Wollongong / Shellharbour / Kiama)

⏱ 12–18 weeks if additional reports are required.

Step 4 — Construction & Service Installation

This is where most of the cost sits. Typical works include:

• Driveway construction

• Installation of new sewer lines

• Stormwater integration

• Water meter and electrical separation

• Retaining walls (if needed)

• Tree removal and new fencing

  
  

A good project manager or civil contractor can dramatically reduce risk.

Step 5 — Subdivision Certificate & Registration

Once the council signs off, your surveyor lodges the plan with NSW Land Registry Services.

You now have two separate titles — ready to:

• Sell

• Build on

• Refinance

• Hold for long-term rental

  
  

What Makes a Block a "Winner"?

Not every block is equal — even if the land size looks right.

1. Flat or Gently Sloped Land

This minimises driveway and retaining costs.

2. Wide Frontage

Battle-axe subdivisions require 3–4m legal access.

3. Accessible Service Locations

If the sewer is in the wrong spot, your budget can blow out quickly.

4. Minimal Tree and Environmental Constraints

Protected species can halt or complicate a project entirely.

5. Strong Demand & Growth Drivers

Subdivision should be part of a larger story—not the whole story.

In the Illawarra, that includes:

• Albion Park – modern sewer, wide streets, family demand

• Dapto / Horsley – large blocks, strong rental appeal

• Kanahooka – older stock with large lots

• Calderwood – emerging value pockets

• Warilla – rezoning opportunities + affordability

  
  

Northern suburbs can work, but blocks are rarer, more expensive, and face more constraints.

Thinking About Subdivision? Get the Numbers Right First.

Subdivision is one of the most effective paths to equity and long-term value — but only when the site is right and the numbers line up from day one.

At The Shoreline Agency, we help buyers:

• Identify true subdivision potential

• Complete feasibility before purchase

• Interpret council requirements

• Understand meaningful costs (not assumptions)

• Access off-market subdivision-ready sites

• Plan a long-term investment strategy

  
  

📞 Book a free feasibility consultation before you commit to a big block — it could save you tens of thousands.

👉 joel@shorelineagency.com.au

See you on the Shoreline.

Disclaimer: This article provides general information only and does not constitute legal, financial or town planning advice. Subdivision requirements vary between councils and individual properties. Always seek advice from a qualified professional and confirm all details with council before making purchasing or development decisions.