Seven hectares of flood-prone land has been turned into infrastructure. Nearly 70 hectares of residential potential has been unlocked behind it.

Colac has a housing problem that has been building for years.

Rental vacancies have sat at 0.03 per cent, a figure so tight it barely registers on a scale. Businesses have resorted to bussing in staff because workers cannot find a place to live. Healthcare positions go unfilled. The town’s economic potential has been capped, not by a lack of demand or industry, but by a shortage of somewhere for people to sleep.

The completed Elliminyt Wetlands project will not solve all of that. But it does something that planning documents and policy announcements rarely achieve on their own: it converts previously unbuildable land into land that can actually hold houses.

The Infrastructure Behind the Headline

The project has redeveloped more than seven hectares of flood-prone land, expanding an existing water basin into a larger basin and wetland system. The new infrastructure is designed to provide flood protection for approximately 70 hectares of downstream land, enabling future residential development in line with Council’s Colac 2050 Growth Plan.

That distinction matters. The wetlands project is not itself a housing project. It is a piece of enabling infrastructure. It manages the water so that the land behind it can be used. Without it, those 70 hectares remain what they have always been: land that floods, land that cannot be rezoned, land that builders cannot touch.

The civil works are now complete, including reconstruction of the basin and delivery of a sediment pond, wetlands area, outlet pond and detention pond. These together manage stormwater, preventing sediment and nutrients from entering Deans Creek and Lake Colac and supporting water quality downstream.

The wetlands project is not itself a housing project. It is a piece of enabling infrastructure. It manages the water so that the land behind it can be used.

The project cost $4.45 million in total, with the Victorian Government contributing $3 million through its Regional Infrastructure Fund and Colac Otway Shire Council committing $1.45 million. Seventeen local construction workers were employed on the project, along with a range of local suppliers.

What Comes Next

The wetlands sit at the front end of a much larger planning program.

The Deans Creek Growth Area covers approximately 477 hectares on the western edge of Colac and, upon completion of development, could accommodate up to 5,700 dwellings. That is a substantial pipeline by any regional standard.

The project connects to the Colac Deans Creek Growth Corridor Outline Development Plan, a government-funded exercise identifying the road network, drainage infrastructure, open space requirements, and active transport links needed to support development in this part of town. The plan was described as a key to unlocking future rezoning of land in the growth areas identified along Deans Creek in the Colac 2050 Growth Plan.

In other words, the wetlands project is one piece in a sequenced infrastructure program. Stormwater comes first. Rezoning follows. Then roads, utilities, lots, and eventually starts.

For builders operating in south-west Victoria, that sequence is worth understanding. Projects like this one tend to move through a predictable chain: enabling infrastructure, planning scheme amendments, precinct structure plans, lot releases, construction. The earlier a builder engages with where a project sits in that chain, the better placed they are when work becomes available. There is broader context here too: Victoria’s greenfield planning system takes an average of 4.2 years per precinct structure plan from start to gazettal, which means the builders who are paying attention now are the ones who will be ready when Deans Creek moves into its delivery phase.

Earlier assessments estimated the Elliminyt area could support approximately 300 residential lots once the flood protection infrastructure was in place. That figure does not represent the full extent of the Deans Creek corridor, but it gives a sense of the near-term pipeline that the wetlands project directly supports.

Why Housing Supply Is the Core Issue

Colac’s housing problem is not unusual in regional Victoria. It is just more visible than most.

Regional and rural Victoria will need 87,400 new dwellings over the next 15 years, according to evidence given to a Victorian parliamentary inquiry into housing supply. The numbers behind that demand are well established: population growth, workforce migration, and an ageing housing stock that does not meet the needs of a changing community.

What makes Colac’s situation particularly acute is the relationship between housing and employment. The town has a significant healthcare sector, with more than 1,600 healthcare and social assistance jobs in the Colac-Otway area. Those jobs require workers. Workers require housing. Without housing, the jobs go unfilled, services deteriorate, and the population pressure that drives demand for more homes becomes self-defeating.

That circular problem is exactly why infrastructure investment of this kind matters beyond its immediate footprint. It does not just unlock land. It removes a constraint that has been holding back the whole local economy.

The Victorian Government is also directly addressing worker housing in Colac through a separate initiative. BDH Constructions has been appointed to build 16 new units for healthcare workers at Colac Area Health, funded through the Regional Worker Accommodation Fund. The local firm’s appointment is expected to support 91 construction jobs across the project supply chain.

The Pattern Behind the Project

It is worth stepping back and looking at what this type of investment actually represents.

Flood-prone land at the edge of a growing regional town is not unusual. There is plenty of it in regional Victoria, Queensland, New South Wales, and elsewhere. What stops it from becoming housing is rarely the absence of demand. It is the absence of infrastructure, specifically the drainage infrastructure that makes the land safe and developable in the first place.

That infrastructure costs money. It does not generate a direct financial return. It does not get built by developers alone, because the cost cannot be recovered from a single project. It requires public investment with a long time horizon and a willingness to accept that the return comes in the form of enabled development, not direct revenue.

The Elliminyt Wetlands project is a relatively modest example of that model. But the logic scales. Across regional Australia, there is land that is sitting dormant not because it is unwanted but because the enabling infrastructure has never been funded. When that infrastructure gets built, development becomes possible. When development becomes possible, builders have work. When builders have work, towns grow.

The Colac 2050 Growth Plan was designed around exactly this premise. The Deans Creek Growth Area alone has been identified as capable of accommodating much of Colac’s residential development for the next 30 years. That is not a small ambition for a town of this size. It depends entirely on the infrastructure being sequenced correctly and funded appropriately.

The wetlands project suggests that sequencing is moving forward.

What Builders Should Know

For builders in south-west Victoria and the Great South Coast region, the immediate implication is straightforward: pay attention to where the Deans Creek corridor is in its planning process, and position early.

Large-scale greenfield programs in regional markets tend to favour builders who understand compliance-heavy planning environments, can deliver consistently across a multi-year pipeline, and have established supplier and trade relationships in the local area. The Deans Creek corridor, once it reaches lot release stage, will need builders who meet those criteria.

As Phil Barrett, who spent two decades helping grow Metricon’s regional Victoria operations, has observed, success in regional markets comes down to one thing above all: building trust with developers, agents, suppliers and trades before the work arrives. The builders who will win in Colac are likely already in the region, or actively building those connections now.

The worker housing project already underway at Colac Area Health, led by local firm BDH Constructions, is a signal that local capacity is being recognised. That is the environment in which early positioning and relationship building tends to pay off.

The infrastructure is now in place. The planning work is progressing. The demand is not going anywhere.

For builders watching regional Victoria, Colac is worth watching back.

The Good Builder Take

Housing supply problems are often described as planning problems. Sometimes they are. But in regional towns like Colac, the constraint is more fundamental: land that floods cannot be rezoned, and land that cannot be rezoned cannot be built on.The Elliminyt Wetlands project does something quiet but significant. It removes a physical constraint that no amount of planning reform could fix on its own. Seven hectares of civil works. Seventy hectares of housing potential unlocked behind it.That is the economics of enabling infrastructure, and it is how regional housing pipelines actually get built.

Frequently Asked Questions

What is the Elliminyt Wetlands project in Colac?

The Elliminyt Wetlands project is a stormwater and flood management infrastructure project in Elliminyt, a suburb on the southern edge of Colac in south-west Victoria. It involved redeveloping more than seven hectares of flood-prone land, converting an existing water basin into a larger basin and wetland system that captures and treats stormwater from previously flood-affected areas. The project was jointly funded by the Victorian Government ($3 million through the Regional Infrastructure Fund) and Colac Otway Shire Council ($1.45 million), and was completed in mid-2026.

How much land has the Elliminyt Wetlands project unlocked for housing?

The wetlands infrastructure provides flood protection for approximately 70 hectares of downstream land, making it suitable for future residential development. Earlier assessments have estimated this area could support approximately 300 residential lots, though the full extent of what will be delivered depends on planning scheme amendments, precinct structure planning, and staged lot releases still to come.

What is the Deans Creek Growth Corridor?

The Deans Creek Growth Corridor is the major residential growth front for the township of Colac. It covers approximately 477 hectares on the western edge of the town and, at full buildout, has been identified as capable of accommodating up to 5,700 dwellings. The corridor is the subject of the Colac Deans Creek Growth Corridor Outline Development Plan, a government-funded planning exercise identifying the roads, drainage, open space, and infrastructure needed to support staged residential development. It sits within the broader Colac 2050 Growth Plan, which is designed around the town’s projected population growth to approximately 20,000 people by 2050.

How is the Victorian Government addressing housing shortages in regional areas?

The Victorian Government has been using a combination of enabling infrastructure grants (such as the Regional Infrastructure Fund that backed the Elliminyt Wetlands project), worker accommodation funding (through the Regional Worker Accommodation Fund), planning pathway acceleration, and long-range growth planning to address housing shortages in regional Victoria. In Colac specifically, these investments include the completed wetlands infrastructure, funding for the Deans Creek Growth Corridor Outline Development Plan, and a separate project to build 16 new worker accommodation units at Colac Area Health.

What opportunities does the Deans Creek development create for builders in regional Victoria?

The Deans Creek Growth Corridor represents a long-run residential pipeline for south-west Victoria. As enabling infrastructure is delivered and planning progresses through precinct structure planning toward lot releases, demand for residential construction will follow. Builders who understand compliance-heavy planning environments, can deliver across multi-year pipelines, and have established local supplier and trade relationships will be best positioned. The near-term pipeline directly enabled by the Elliminyt Wetlands project alone points to approximately 300 lots. The corridor as a whole is planned to absorb much of Colac’s residential growth for the next 30 years.

This article is provided for general information purposes only. It does not constitute legal, financial, or professional advice. Readers should seek independent advice relevant to their specific circumstances.

Author: TGB Editorial