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It can be 'too big' - it becomes unviable for a two lot subdivision or not quite big enough to get an extra property out of the subdivision.

Each council area has different requirements. In Blacktown you would need 800 m2 or 850 m2 if it were a corner site but other councils want 500m2 minimum block sizes. I wouldn't disregard a house because it needs minor work - could be advantageous to spend on kitchen/bathroom and exterior...