Unlocking Possibilities: A Comprehensive Guide to Assessing Your Property's Development Potential

TL;DR

• Zoning, site characteristics and feasibility determine development potential — not just land size.

• Many properties that "look" developable fail to meet planning controls and constraints.

• Zoning, minimum lot sizes and access are the first filters — but not the final answer.

• Costs, timelines and market demand matter just as much as what council allows.

• A buyer's agent helps separate genuine opportunity from expensive assumptions.

Who this article is for:

• Buyers considering subdivision or dual occupancy

• Investors seeking value-add opportunities

• Homeowners assessing future development options

• Anyone buying land with "potential" in mind

The phrase "development potential" is one of the most overused — and misunderstood — terms in property. It's often attached to listings without context, clarity or feasibility, leaving buyers to assume value where it may not exist.

In reality, assessing development potential requires a structured, unemotional approach. It's not about what could be built in theory — it's about what can be built legally, practically and profitably.

This guide outlines how to assess development potential effectively, so you can make informed decisions before committing capital.

1. Start With Planning Controls, Not Assumptions

Every development assessment begins with planning. Without zoning alignment, no amount of creativity will unlock potential.

Understand the Zoning

Zoning dictates what the council allows on a site. Standard residential zones include:

• R2 – Low-Density Residential

• R3 – Medium Density Residential

• R4 – High-Density Residential

Each zone controls:

• permissible uses

• density

• minimum lot sizes

• building height and setbacks

A property's zoning sets the outer limits of what's possible — but it doesn't guarantee approval.

Minimum Lot Size (MLS) Is Critical

For subdivision or dual occupancy, minimum lot size requirements must be met after accounting for access, setbacks and constraints.

A block that appears large enough often fails once:

• Driveway access is included

• easements are excluded

• Unusable land is removed

This is one of the most common reasons development plans fall over.

Overlays and Planning Constraints

Many properties are affected by overlays, such as:

• flood controls

• bushfire-prone land

• coastal management

• heritage or conservation areas

• escarpment or environmental protection

These overlays can significantly restrict building envelopes, increase construction costs or prevent development entirely.

Always review the LEP and DCP — not just zoning labels.

2. Evaluate the Site Itself — Not Just the Map

Once planning controls are confirmed, the physical site becomes the next filter. This is where many" on paper" opportunities fail.

Land Shape, Slope and Access

Practical development relies on usable land.

Key considerations include:

• slope and fall direction

• frontage width

• access for vehicles

• ability to provide compliant driveways

• location of existing structures

Flat, wide blocks with good street access are generally more flexible and cost-effective to develop.

Services and Infrastructure

Each new dwelling or lot requires compliant access to:

• sewer

• water

• stormwater

• electricity

• telecommunications

If services are distant, deep or misaligned, costs can escalate quickly — sometimes to the point where development is no longer viable.

Easements and Encumbrances

Easements for drainage, sewer or access can sterilise portions of a site.

While not always deal-breakers, easements reduce buildable area and can restrict layout options. Understanding their location early prevents costly redesigns later.

Existing Buildings

In some cases, retaining the existing dwelling improves feasibility. In others, demolition is required.

Key questions include:

• Can the existing home remain during development?

• Does it comply with setback rules?

• Is it structurally sound?

These answers materially affect cost, timeframes and holding expenses.

3. Assess Feasibility — Not Just Possibility

Just because a property can be developed doesn't mean it should be.

Understand the True Costs

Feasibility isn't just construction. It includes:

• planning and consultant fees

• council contributions

• subdivision costs

• service upgrades

• demolition (if required)

• holding costs

• contingency buffers

Underestimating costs is the fastest way to turn a "great opportunity" into a poor outcome.

Market Demand Matters

Development potential is valuable only if the end product is desirable.

Ask:

• Who will buy or rent the finished dwellings?

• Does the suburb support this density?

• Are similar developments selling well?

In many locations, owner-occupier demand drives stronger outcomes than investor-focused stock.

Timing and Risk

Development often takes longer than expected.

Approvals, conditions, and construction delays are standard—especially for first-time developers.

If your strategy relies on short timelines or thin margins, risk increases significantly.

When Development Potential Adds Value

Development potential tends to add value when:

• Zoning clearly supports it

• Site constraints are manageable

• Costs are realistic

• Demand is proven

• timeframes align with your goals

If too many variables are uncertain, potential becomes speculation.

Local Insight: Why Development Requires Local Knowledge

Planning rules vary by council — and interpretation matters.

Two similar sites can receive very different outcomes depending on:

• local planning priorities

• precedent approvals

• infrastructure capacity

• neighbourhood character expectations

This is where local experience becomes invaluable. Understanding what councils approve in practice — not just on paper — is often the difference between success and frustration.

Common Mistakes Buyers Make

• assuming land size equals development potential

• ignoring overlays and easements

• underestimating service costs

• relying on agent descriptions without verification

• skipping feasibility due to "future potential"

Most development mistakes are made before purchase — not during construction.

Development Potential Should Support Your Strategy — Not Drive It

The strongest outcomes come when development potential is a bonus, not the sole reason for buying.

A property should still make sense as:

• a long-term hold

• a quality asset

• a liveable or lettable home

If development does not occur, the property should still perform.

Thinking About Buying With Development Potential in Mind?

Assessing development potential requires clarity, discipline and local insight. A single oversight can erase years of gains.

At The Shoreline Agency, we help buyers:

• Assess zoning and planning controls

• Identify genuine development opportunities

• avoid costly assumptions

• understand feasibility and risk

• Buy with confidence and strategy

📞 Contact The Shoreline Agency to discuss development potential before you buy.📧 joel@theshorelineagency.com.au

See you on the Shoreline.