How to Choose the Best Location for a Farm Dam

Picking the right spot for your dam is the single most important decision in the whole project. Get it right and your dam fills every year, holds water through dry spells, and does exactly what you need. Get it wrong and you’re looking at a dam that barely holds water, costs a fortune to fix, or never fills in the first place.

If you’re a first-time dam owner — or you’ve just bought a rural block and you’re trying to figure out where to start — this guide walks you through exactly what to look for before you call a dam builder.

Start with your catchment area

The catchment area is the land that drains rainfall toward your dam site. Think of it like a funnel — the bigger the funnel, the more water collects at the bottom.

A dam with a small catchment will struggle to fill, especially in drier years. A dam with a large catchment fills quickly and stays fuller longer. As a rough guide, most farm dams need a catchment area at least 10 to 20 times the size of the dam’s surface area — though this depends heavily on your average annual rainfall and how much runoff your soil type produces.

Walk your property after rain and watch where the water flows. Low points, natural gullies, and channels that run with water after storms are exactly what you’re looking for. Mark them on a map or drop GPS pins as you walk — this becomes your shortlist of potential sites.

Look for natural low points and gullies

The ideal dam site sits at the bottom of a natural gully or valley. You’re looking for a spot where the surrounding land slopes toward a single low point — this concentrates runoff naturally and means your dam fills from multiple directions at once.

A gully dam is built by blocking a natural drainage line with an earth embankment. The gully does most of the work — it channels water into the dam storage area automatically. This is the most common type of farm dam in Australia and generally the most cost-effective to build.

Avoid sites that are too flat — water won’t concentrate there and the dam will need to be enormous to hold any useful volume. Also avoid the very top of a ridge or high point on the property, where there’s little catchment behind you.

Test the soil before you commit

Even a perfectly placed dam in the ideal landscape position will fail if the soil can’t hold water. Clay-rich soil is what you’re after — it compacts into a dense, water-resistant barrier. Sandy, gravelly, or highly permeable soils let water seep straight through the walls and floor.

You don’t need a lab to do a basic check. Try this in the field:

• The ribbon test: wet a handful of soil and try to roll it into a thin ribbon between your fingers. If it holds a ribbon longer than 25mm without breaking, it has reasonable clay content. Sandy soils crumble immediately.
• The jar test: fill a jar with soil and water, shake it, and let it settle. Clay particles stay suspended and settle last — a thick murky layer at the top means high clay content.

If you have doubts, a geotechnical engineer or experienced dam builder can do a proper soil assessment. It’s a small cost compared to building a dam that leaks from day one.

What to avoid: the common siting mistakes

A lot of first-time dam owners learn these the hard way. Check your shortlisted sites against this table before you make a decision.

What to avoid	Why it’s a problem	What to do instead
Trees on or near the dam wall	Roots penetrate compacted clay and create seepage paths that lead to leaks and wall failure	Keep the wall and a buffer zone around it clear of any trees or large shrubs
Highly sandy or gravelly subsoil	Water seeps straight through — the dam will never hold a useful amount	Test soil before building; if sandy, consider a bentonite treatment or clay liner
Too close to buildings or fences	Dam walls need room to settle; flooding risk if the wall is overtopped	Allow at least 20–30m clearance from structures; check your council rules
On a major watercourse	Can require water licences; higher risk of flood damage; regulatory complications	Build on a minor drainage line or off-stream where possible
No clear inflow path	The dam won’t fill reliably if there’s no concentrated runoff flowing toward it	Confirm there’s a natural drainage channel running into the site before you build
Rocky or shallow subsoil	Hard to excavate to depth; foundation sealing issues	Do a test dig or rod probe before committing to the site

Think about how you’ll use the dam

The best technical site in the world isn’t much use if your cattle can’t get to it, or if it’s a 20-minute drive from the house every time you need to check it. Practical access matters just as much as soil type and catchment.

Ask yourself these questions for each candidate site:

• Can stock reach it easily without long walks or crossing fences?
• Can a vehicle get to the dam wall for maintenance?
• Is it visible from the house or a regular track so you can monitor water levels easily?
• Is there room to fence livestock away from the dam wall (to protect it from trampling damage)?
• Will the overflow (spillway) drain somewhere safe without eroding a paddock or heading toward a building?

Consider sun, wind, and evaporation

Australian summers are brutal on open water. A dam in a fully exposed position with no shade and strong prevailing winds will lose significantly more water to evaporation than one in a sheltered position. This matters most in hotter, drier inland areas.

If you have two similar sites to choose from, favour the one that gets some afternoon shade, is more sheltered from the main wind direction, or is deeper relative to its surface area. Deeper dams evaporate less per litre stored than shallow, wide ones — so this is another reason to choose a site where you can build depth rather than just spread.

Get a site inspection before you build

Even experienced dam builders will tell you: every site is different. What works on one property doesn’t automatically work on the next. That’s why a professional site inspection before any earthworks start is money very well spent.

A good inspector will assess soil type and subsoil conditions, map the catchment area, check for any regulatory issues (water licences, planning rules), and give you a realistic picture of what size and type of dam the site can support. The information you get from a proper inspection shapes every decision that follows — including whether a particular site is worth building on at all.

Key takeaways

• Choose a natural low point or gully that collects runoff from a large catchment area
• Check soil for clay content before committing — sandy or gravelly subsoil means seepage problems
• Avoid trees near the wall, flat sites with no inflow, and locations too close to buildings
• Think about practical access for stock, vehicles, and day-to-day monitoring
• Deeper dams lose less water to evaporation than shallow, wide ones
• A professional site inspection before you build is the most cost-effective step you can take

Frequently asked questions

How do I know if my property has a good dam site?

Walk the property after heavy rain and look for where water naturally collects and flows. A natural gully or low point with clay-rich soil and a large area of land draining toward it is a strong candidate. A site inspection by an experienced dam builder will confirm whether it’s viable.

Does the dam have to be at the lowest point of the property?

Not necessarily the absolute lowest — but it should be in a position where a meaningful area of higher land drains toward it. You need water to flow into the dam naturally from rainfall runoff. A site at the bottom of a gully or small valley usually works well.

Can I build a dam anywhere on my block?

No — aside from practical considerations, there may be planning and water licence requirements depending on your location, the size of the dam, and what watercourse it sits on. Check with your local council and WaterNSW before you choose a site.

How far should a dam be from the house?

There’s no universal rule, but most builders recommend keeping the dam wall at least 20–30 metres from any structures. You also want to make sure the spillway overflow path doesn’t head toward the house or sheds in a flood event.

Ready to get started? Book a site inspection with Big Ditch — from $500.

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