Before you go ahead and buy the older block,check with the council in the area about subdivision costs,also when the older house is demolished all the old existing underground pipes such as plumbing,stormwater drains, gas if any, and sewer pipes are all ripped up,also take into account the cost of the demolition, the cost of just prepairing the land for construction can be double,that of a similar land that is already subdivided and ready to build on, such as new land realease areas.
The cost of subdividing  and established land here in Victoria can be as high as $6000 as a town planner is neede to do the plans and applications, If you are just looking for a house to live in, there might be better houses and deals in the outer suburbs.
But if you are looking to invest,do your home work and research and also ask other investers who have experience in this area,

Regards
merimbula