The suburb's location is environmentally sensitive as it is situated directly between two important conservation areas, the Braeside Park and Edithvale Wetlands.

Planning permits are strictly regulated and gardens monitored to prevent the introduction of foreign species that may become invasive and threaten the abundant native wildlife in the area.

The name "Waterways" comes from a number of man-made lakes, lagoons and wetlands in and around the estate, which form an interconnected waterway to the Mordialloc Creek and a wildlife corridor connecting Braeside Park to its north and the Edithvale Wetlands to its south.

Waterways was rated higher than Toorak, Brighton or Canterbury – or anywhere else, apart from the 63 people living on South Wharf – in an index of socio-economic advantage compiled from the 2011 census.

[2] Waterways have multiple bodies of water interconnected by channels, underground aqueducts and wetlands, all surrounding an elongated land known as "the Island".