A revised $720,000 four-unit proposal has been submitted to the council for a vacant block on the corner of Yarralumla Drive and Castle Creek Road.

Councillors snubbed the original application, despite a staff recommendation, after declaring it did not fit with the amenity of the area and would generate traffic safety concerns.

EDM Group planning manager Peter O'Dwyer, who is representing the owner, said a new application was seen as a better option than appealing the council's decision to the Victorian Civil and Administrative Tribunal.

“The owner was bit reluctant to head straight off to VCAT because of the time it would take to get a hearing, it could be up to eight months,” Mr O'Dwyer said.

“As an offer of compromise he felt by taking one unit off that would give more space around the units and that might appease the neighbours.”

However, the move has not allayed the concerns of several nearby householders who have formally objected to the council.

“The residents still aren't happy with that, we don't think it's a big enough compromise,” Bec Harris, whose property adjoins the block, said.

Fellow resident Noel Bennett said he was concerned there was only one visitor car park for the units and its position at the entry of Castle Creek Road would cause congestion.

“It's a beautiful area and they're going to have five units on it, I just don't understand it,” Mr Bennett said.

Chris Daly, who lives in Castle Creek Road with his parents, had similar fears.

“It's going to be far too congested and we don't believe it suits the character of the estate,” Mr Daly said.

“There's not one set of units in this estate and they're wanting to put five on one block.”

A mediation session involving objectors and the proponent was held last week without common ground being reached.

Mr O'Dwyer said he believed councillors had “mashed up” the concepts of amenity and neighbourhood character in refusing the original plan.

“If I was a councillor I think I would be pretty persuaded they've dropped a unit,” Mr O'Dwyer said.

He said if the four-unit proposal was rejected, the matter could be appealed to VCAT where the $900,000 five-unit blueprint could be revived.

Six objections have reached the city, meaning the plan will be decided by councillors rather than officers, possibly at council’s February 15 meeting.