The Diamond Gully area was identified for residential growth in a number of Council's strategies including the Urban Living Strategy and Castlemaine Residential Study. In 2004 Council starting investigating and preparing the Diamond Gully Structure Plan.
Diamond Gully is identified on the Castlemaine Land Use Framework Plan (included at clause 21.03 of the Mount Alexander Planning Scheme) as Castlemaine’s primary urban growth area. The area is located at the south-western edge of Castlemaine and covers an area of 182 hectares. The area has the potential to meet the projected demand for new residential land at Castlemaine over the next 15 years.
The Diamond Gully Structure Plan was adopted by Council in April 2010. However the start of an amendment to the Mount Alexander Planning Scheme to give effect to the Structure Plan was delayed due to the need to revise the plan to take into account the bushfire planning provisions introduced following the 2009 Bushfires Royal Commission. Following changes to state-wide bushfire policy at the end of 2011 and in 2012, Council undertook another bushfire assessment of the area and commissioned a review of the Structure Plan.
The Structure Plan identifies the preferred urban form for the area, and provides for connectivity and linkages within the area and externally to Castlemaine and Campbell’s Creek. The Structure Plan has been prepared with regard to the need to promote subdivision and residential development against other considerations including the protection of wildlife and human life with regard to bushfire danger. It also considers the potential for contamination of land proximate to the Castlemaine landfill and areas previously used for landfilling.
The Structure Plan identifies various development outcomes for the different areas which make up the structure plan. These outcomes range from conventional residential densities (500 – 1000 m2 lots) in the infill residential areas in the northern part of the site, conventional and medium density densities in the southern greenfield areas, and low density residential densities (1ha – 2ha) in the perimeter areas.