How Victoria’s New Planning Laws Just Made You a Developer

https://www.youtube.com/watch?v=DaIODVIPB68

If you own a block of land in Victoria right now, you might already be a property developer and just not know it yet.

The ResCode planning rules just changed. And I don’t mean tweaked. I mean the kind of change that turns a site that never made sense previously into one that makes all the sense in the world now.

I’ve been doing this for over fifteen years. I’ve watched councils drag projects out for months, seen good sites limited by rules that didn’t reflect what the market actually needed, and watched developers walk away from blocks that should have worked.

That frustration? A lot of it just got resolved.

The 2025 planning reforms are flowing through now in 2026, and if you know how to read them, some sites that previously didn’t make the numbers work now absolutely do.

Today I’m going to walk you through exactly what changed, how to find the sites that benefit most, and what you need to watch out for so you don’t run out and overpay based on a misunderstanding of the rules.

Because that part matters just as much as the opportunity.

But there’s one thing most people completely miss when they look at these changes. And it’s the reason two developers can look at the exact same site and reach completely different conclusions.

I’ll show you what that is before we’re done.

What Actually Changed

Let me give you the plain English version because the planning documents themselves are not exactly a page turner.

Before these changes, if you were trying to get a townhouse project through council, you had a lot of things working against you.

Front setbacks. Side setbacks. First floor setbacks. These rules dictated how far your building had to sit from boundaries at different levels. And on a lot of sites, those rules were the thing quietly killing your yield, pushing your dwellings back, shrinking them down, or just making it impossible to fit what you needed on the block.

The new rules have relaxed those requirements meaningfully. Particularly the first floor setbacks, which is where we’re seeing the biggest practical difference out on real sites.

What that means in plain terms is that on the right block, your dwellings can be bigger, or you can fit more of them, or both.

And the approval process itself has been streamlined. Council now has fewer levers to pull when it comes to standard residential development. The grounds on which they can delay or knock back a compliant application have been narrowed.

That doesn’t mean you get a rubber stamp. But it does mean a well designed project on a good site has a much cleaner run through the system than it did before.

These changes apply broadly across general residential and neighbourhood residential zones statewide. So this isn’t limited to one pocket of Melbourne. It’s Victoria wide.

That is why the conversation around New Planning Laws Victoria matters so much right now. For the right sites, these changes can materially shift what a block can achieve.

A Real Example

Let me give you a real world example because the numbers are what make this click.

We had a corner site, and I’ll come back to corner sites in a minute because they’re worth paying attention to, where under the old rules we were achieving three four bedroom dwellings, each around twenty four to twenty five squares.

That was it. Three homes, solid product, but we were having a bit of a push and pull with council getting it through.

Under the new rules, the same site now supports four dwellings. Still four bedrooms each, slightly smaller at twenty two to twenty three squares, but four of them.

Think about what that does to your development feasibility study.

You’re dividing the land cost across four dwellings instead of three. Build costs will go up a touch because you’re constructing one more home, but you’ve now got four assets to sell or hold instead of three.

The feasibility goes from good to genuinely exciting.

And if you’d rather keep the three dwellings and use the new rules to go bigger instead of denser, you can do that too. Each dwelling can push up toward twenty eight to thirty squares.

Two very different strategies from the same rule change.

Which one you choose comes back to your numbers, your market, and what buyers in that area are willing to pay for.

Where to Find the Opportunities

Alright, so where do you find these sites?

Start with VicPlan. It’s the Victorian government’s free planning portal, and it’s where you check the zoning and any planning overlays on a specific property. If you haven’t used it before, look it up. It takes about three minutes to run a check on any address.

What you’re looking for is general residential zone or neighbourhood residential zone without heavy overlay restrictions.

The zone gives you the opportunity. The overlays tell you how complicated the path is going to be.

Heritage overlays, significant landscape overlays, vegetation overlays, these haven’t gone anywhere.

Council may have less power to knock back a compliant application, but if an overlay adds mandatory requirements to your design or approval process, that’s still your reality.

The sites where these changes have the most impact are the ones with clean or minimal overlays.

On location, the same fundamentals apply. Activity centres, shopping strips, train stations, schools and services are where council and the state government want density to go, and they’re also where your end buyers want to be.

Follow the resale values. If good sales data doesn’t exist in an area, the density play doesn’t stack up.

Corner sites are worth specific attention.

The way the new rules interact with corner blocks, particularly around crossovers and setbacks, means a lot of corners that were marginal before are now worth taking a hard look at.

We’ve seen some pretty dramatic improvements on corner sites.

And then there’s the one thing most people miss.

The ugly house on the big block.

You know the one. Every suburb has them. An old home that hasn’t been touched in decades sitting on a generous allotment in a location that would otherwise be expensive.

Under the old rules that site might not have stacked up. Under the new rules, run the numbers again.

A lot of these have quietly become viable.

If you’re trying to get across the New Planning Laws Victoria changes properly, join the Little Fish Network. It’s our free proeprty devloper community where developers are actively sharing what they’re learning and helping each other improve. It takes two minutes to join.

What Still Trips People Up

Here’s the thing.

New rules don’t make a bad site good.

And this is where I want you to be careful, because the excitement around these changes can push people into making decisions they’d normally question.

Easements. Orientation. Significant trees. Overshadowing rules. Neighbour setbacks. None of that has gone away.

A site with a big easement running through the middle or a protected trees on your development site sitting in the wrong spot is still going to hurt you, possibly more than before, because you’ve now built an assumption about yield into your purchase price.

Don’t overpay. This one is critical right now.

Land is only worth what you can build on it and sell.

If a vendor or an agent starts pitching a block to you as a development site and referencing the new planning rules, that’s the market catching up.

The opportunity lives in finding sites where the uplift in yield hasn’t yet been reflected in the asking price.

That window won’t stay open forever.

Build costs are still high.

I’ve done a full video on what it costs to build in 2026. Link will be in the description. But the short version is that the cost to build a house has roughly doubled over the last several years and they haven’t come back.

So the improved feasibility from getting an extra dwelling on a site is real, but it doesn’t give you a free pass on the numbers.

Run the feasibility properly every time. No assumptions.

And the biggest thing most developers miss is the one I mentioned at the start.

Two developers can look at the exact same site under the exact same rules and reach completely different outcomes.

Not because one is smarter than the other. Because one of them has a designer, a town planner, and a team who understand how to optimise a site under the new code.

And the other one doesn’t.

The rules create the opportunity. Your team is how you convert it.

A designer who’s still drawing to the old setbacks. A planner who hasn’t worked through the new code. Property development consultants who doesn’t understand how to push the envelope properly on these sites.

That’s how you leave yield on the table.

Or worse, buy a site thinking it’s a four dwelling block and end up with three because no one in your corner knew how to get there.

Pulling It Together

So here’s where things land.

If you own land in Victoria right now, or you’re actively looking, these changes deserve your attention.

Specific sites, in specific zones, with the right overlay profile, have genuinely become better development opportunities than they were twelve months ago.

That’s real. It’s not hype.

But if you’re looking at sites without understanding the overlays, running the numbers without accounting for current build costs, or working with a team that hasn’t updated their thinking since the code changed, then the opportunity isn’t yours to take.

You’re just paying more for the same result.

Get across VicPlan. Understand your zoning. Check your overlays. Run your feasibility with current numbers, not last year’s. And if you’re serious about doing this well, make sure the people around you know the new rules as well as you do.

That’s where the upside lives.

The New Planning Laws Victoria opportunity is real, but only if you understand what has changed, what still matters, and how to turn the rules into a properly assessed development outcome.

If you’re not already in the Little Fish Network, that’s step one. It’s free and takes literally two minutes to join.

If you want more direct support, I offer one on one mentoring where you get me in your corner, every step of the way.

And if finding the right site is where you’re stuck, my team runs a buyer’s agent service specifically for development sites.

And if you’d rather hand the whole thing over, we run full end to end project management. Book a call with me and we’ll figure out the best path for your situation.

Filled under: All Developer Insights Subdividing