A 34-LOT residential subdivision in Warwick has been approved by the council, despite being partly in a flood hazard area.

The subdivision is in swamp land off Cleary St, and borders a caravan park and service station.

Councillors voted unanimously to approve the subdivision, which will be subject to 25 strict conditions.

The conditions surround drainage on the site, with the council demanding an alternative access point be established via Dragon, Carmody or Wallace St.

Despite the approval, the development may never go ahead.

The land has been owned by the Catholic Diocese of Toowoomba since the 1960's and has sat idle for more than 50 years.

St Mary's Catholic Church Father Franco Filipetto said no decision had been made on whether the land would be developed.

"We were asked to improve the value of the land by making it residential," he said.

"We need to see what the conditions are and what is involved before we do anything."

Even if the church decides to develop, construction could still be years away, Fr Franco said.

The subdivision has raised concern with the neighbouring Kahlers Oasis Caravan Park.

Owners Tony and Majella Kahler made a written submission to the council, voicing their issues.

The Kahlers expressed concerns that their property could be damaged if the development restricted water flow in the area.

"In previous events this water course has seen large volumes of water flow through this location," they wrote. Deputy Mayor Cr Ross Bartley also expressed concerns about flooding on Cleary St.

"It's quite significant what could happen here," he said.