[+] Development and the Daylesford Dilemma

Home to hot springs, wellness retreats and good food and wine, Daylesford has long been a playground for well-heeled Melburnians. Now, a scarcity of homes in the area is presenting an opportunity for developers looking to capture forecast population growth for the region. The Shire of Hepburn is planning for an increase in residents from 16,604 in 2021 to 17,700 in 2036. To that end, the council has drafted a new structure plan for Daylesford, expanding its urban boundaries to allow more housing development. But council documents also show that of the 9447 existing private homes in Daylesford, 2008 are vacant—twice the state average of 22 per cent. It is a challenge many other tourism-orientated regions face, and one not easily solved for. Rezoning rationale According to the council’s structure plan there is opportunity for more housing development in the town’s centre. “There is sufficient scope for further residential development within the Daylesford town core boundary with a well located cluster of large land parcels east of East Street currently zoned as Farming Zone, that should be included in the boundary and rezoned as Neighbourhood Residential Zone,” the structure plan says. The plan recommends industrial expansion into farming zone land, while a rural conservation zone at Hepburn Springs should be rezoned for residential development. Residents are concerned about the potential rezoning of farmland, saying it will lead to the very land that provides the ingredients for Daylesford’s reputation as a foodie destination being given over to housing, affecting the town’s identity, appeal and economy. ▲ A section of the Daylesford town centre. Belle Property Daylesford principal director Will Walton says the current zonings have created a scarcity of suitable development sites. “We have limited development residential land on offer as our community is keen to ensure we protect the rich ... fertile farming soil we have here that frames the picturesque landscape locals and visitors enjoy,” Walton says. “Any development or project that is launched is very successful due to the lack of future land opportunities and the strong brand popularity of Daylesford with consumers.” So much so that Channel Nine’s The Block is moving into the neighbourhood. The reality TV series will descend on Daylesford to film its 2025 season after winning approval from Victorian Planning Minister Sonya Kilkenny, despite local objections. The broadcaster acquired five lots in Daylesford’s biggest development, Hygge Property’s Middleton Field. Established in 2017, the regional developer has a 4.81ha masterplanned estate at 17 Smith Street under way. Hygge director Adam Davidson says the site makes sense for urbanisation. “Daylesford is a high-value area and great peri-urban location, offering up the benefits of regional living while still being a commutable distance to Ballarat, Bendigo and Melbourne,” Davidson tells The Urban Developer . The site has frontage to Raglan Street, which becomes the Midland Highway, and is close to Daylesford Secondary College and St Michael’s Primary School as well as the hospital. “Exploration of the Daylesford township on foot or by bike was an important consideration, with the Middleton Field site close to key amenities including cafes and shops, the Sunday market, primary and secondary schools and medical services,” Davidson says. ▲ The Block host Scott Cam: The show will this year be shot in Daylesford. The project is named after the original homestead on the site, Middleton House, believed to have been built by John Howe in the 1870s, and now being renovated by a local family. In 2022, Hygge Property met The Block ’s executive producer, Julian Cress, to consider the show working with land that is part of Middleton Field. “Since Hygge first started planning a new community in Daylesford, locals and the municipality were clear around a desire to see a mix of sustainable housing options within Middleton Field,” Davidson says. Middleton Field will comprise 60 land lots and more than 50 townhouses across two village sections. There will be 31 eco-townhouses designed by architects Breathe in The Village, with four of those homes owned and operated by Women ’ s Property Initiative as affordable housing. The other, the Market Collection, includes several lots close to a Sunday market. Channel Nine bought five 2400sq m lots on the eastern side of the site for an undisclosed sum. Despite the pushback from some during planning for The Block project, Davidson says the response from the community has been positive. ▲ A render of Breathe ’ s design for the eco-townhouses in Middleton Field's The Village. Accommodation, infill housing targeted In September, the council plans to hold a meeting to discuss the structure plan for Daylesford. Once the drafts for all five structure plans within the shire have been adopted by the council, a planning scheme amendment will be drafted for consideration by the state planning minister. Exhibition of that amendment is expected in the second or third quarter of next year. In the interim, the draft structure plan has highlighted opportunities for developers in what the council thinks Daylesford will need in the near future. It has highlighted that the hospital zoning will need to allow expanded services as the populattion grows and ages, raising the possibilities of healthcare and medical facility development. A masterplan for key community buildings is also on the cards, as is the redevelopment of existing commercial buildings for denser use. Increasing housing in infill areas within the urban zone and purpose-built tourist accommodation within the city centre are also listed as key strategies for the council. It is hoped the latter will free up existing vacant homes for permanent housing rather than accommodation. Daylesford, like many other regional towns and hubs, is keeping a watchful eye on a raft of issues as it looks to the future, from infrastructure needs and the risk of overtourism. The balancing act of keeping everyone—local or visitor—happy is never easy. How that will play into development in the city remains to be seen, but it remains certain that the popularity of this destination will only grow. You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Development and the Daylesford Dilemma

Get the full story.

Wellness Underpins Golden Age Heritage Home Strategy

Power to the Port: Momentum Grows for Northern Adelaide’s Riverside Revival

Borger Warns Sydney’s Olympic Park Risks Missing Housing Moment

‘Maybe in a Decade’: Metricon Chief Executive’s Big Bet

Beyond the Building: Guest Experience Firms as Hotel Gamechanger

Sydney Developer Outlook Lunch Series | Panel | Jessica Kelley, Ben Finger & Pierre Sleiman

Sydney Developer Outlook Lunch Series | Keynote | Terry Rawnsley

Brisbane Developer Outlook Lunch Series | Panel | Michael McNab, Alex Levy, Julian Simmonds & Christie Leet

Brisbane Developer Outlook Lunch Series | Keynote | Terry Rawnsley

First Stage of ACT’s ‘Tradies’ Plans for Dickson Go Public

Wellness Underpins Golden Age Heritage Home Strategy

Graya Plans $150m Riverfront Tower in Brisbane’s St Lucia

Behind the Winners: What Makes Projects Shine in 2026

Perth Developer Symposium

Hotel Developer Summit

The Urban Developer Awards for Industry Excellence