Canal estates are housing developments in coastal lowlands. A recent increase in the number of canal estates has been noted in the Australian coastline. Such developments almost always cause the lowering of the watertable for some period oftime, as required during construction periods. Many ofthe Australian coastal lowlands contain pyrites that cause acid pollution upon oxidation. The lowering of the water table to allow for dry excavation constructions may lead to the oxidation of the pyritic soils producing acid in the soil matrix. Also, the dredging and bringing of acidic material to the surface lead to surface water pollution downstream. Moreover, being close a large store of sea water, intrusion of saline water may also occur due the imbalance of subsurface fresh and salty waters dynamics. At present, there is lack of literature on coastal canal estates and the paucity led to this study, which investigated the subsurface water quality during construction of a canal estate in North Brisbane in Queensland. Groundwater depth, pH, dissolved oxygen, titrated acidity and salinity were monitored on site at the Lake Kawana development. Groundwater monitoring was carried out before, during and after the dewaterinll program. As expected the data analysis showed that the water level decreased during dewatering activities and increased after re-flooding. The dissolved oxygen, titrated acidity and salinity levels rose during periods of increased groundwater depth, while pH levels fell. The increase in oxygen availability and the associated increase in acidity, may lead to dissolution of heavy metals, but monitoring data was lacking in this regard. Since salinity may increase due to other close by saline surface water bodies such as a tidal affected river, further studies are required to understand subsurface flow patterns during dewatering operations. Computer simulation models should be developed 10 determine the flow patterns and salinity and acidity profiles in such ofdewatering and re-flooding operations.