Is 999 Better Than 1001sqm? Why 2sqm Can Break Your Townhouse Feasibility in Victoria

By Swarup Dutta | Town Planner & Development Feasibility Specialist | 20 February 2026

So, you've finally found it – a generous development site in suburban Victoria with a long north-facing side boundary, perfect for a neat row of four townhouses bathed in natural light. The block is largely level, with a wide street frontage that can comfortably accommodate two crossovers and driveways, and a clear grassed nature strip with no street trees, power poles or hydrants in the way.

On paper, it's a dream townhouse site. The land area is 999sqm.

In the same neighbourhood, close to good schools, public transport and shopping, another listing hits the market: a 1001sqm block with the same orientation and similar conditions. The existing dwellings on both lots are not worth retaining, so you're looking at two clean redevelopment opportunities.

If the asking prices are similar, common sense says the 1001sqm site should be the better buy. Bigger land, more options – right? Not necessarily.

The Hidden Trap: Clause 52.37 Canopy Tree Requirements Around 1000sqm

Since Amendment VC289 (15 September 2025), Victoria's Clause 52.37 (Canopy Trees) has introduced strict canopy cover targets across residential zones (GRZ, NRZ, TGZ, etc.). Sites must provide minimum canopy cover at maturity, which steps up sharply at key thresholds.

For sites ≤ 1000sqm: approximately 10% canopy cover (e.g. 99.9sqm on a 999sqm lot).

For sites > 1000sqm: 20% canopy cover (e.g. 200.2sqm on a 1001sqm lot).

These deep soil zones cannot overlap with building footprints, driveways or areas where mature canopies would overhang dwellings or neighbouring lots. Crossing that 1000sqm line can instantly double your unbuildable landscape area

The killer: Tree canopies cannot overhand your house, adjoining lots or boundaries!

How 2sqm Can Cost You a Dwelling (and Your Profit)

From a pure area perspective, 1001sqm only gives you 2sqm more than 999sqm. Yet the planning trigger forces you to surrender an extra ~100sqm of usable land.

Frequently Asked Questions

Why can a 999sqm lot be better than 1001sqm for townhouse development?

A 999sqm lot typically requires ~10% canopy cover (99.9sqm), while 1001sqm jumps to 20% (200sqm) under Clause 52.37, leaving less room for buildings and open space.

Does Clause 52.37 apply to my greenfield site?

Yes, vacant lots in residential zones require permits for canopy tree removal and must meet the 10-20% canopy cover targets based on site area.

How do I check canopy requirements before buying?

Request a planning feasibility study that models Clause 52.37 alongside ResCode open space and setback rules.

About the Author

Swarup Dutta is a Melbourne-based town planner, designer and development feasibility specialist advising on multi-unit residential projects, dual occupancy and childcare centre approvals. He regularly navigates Victorian Planning Provisions including Clause 52.37 canopy trees and ResCode compliance. Book a site feasibility review.

Need Help With Your Next Site?

Before committing to a lot near the 1000sqm threshold, get our Townhouse Feasibility Calculator or book a 15-minute site review.

"The 999sqm lot often delivers higher net yield and simpler permit pathways than sites just crossing the 1000sqm threshold."

Swarup Dutta, B.Arch

Registered Planner - Property Development Consultant - Former Developer & University Lecturer (VIC)

Call him today.