Unlike neighbouring areas Christmas Hills did not have goldmining or significant amounts of agricultural land, although the One Tree Hill on its western side was a mining site. Nevertheless it helped numerous settlers who earned income from firewood as their selections were cleared. In 1884 a primary school was built, and three years later the district's population was boosted by a temporary workforce employed on building an aqueduct from the Watts River weir to Preston reservoir. In 1904 The Australian Handbook described Christmas Hills as -
Access to Christmas Hills was improved in 1912 when the railway was extended from Heidelberg to Hurstbridge. Christmas Hills' elevated landscape attracted tourists and holiday makers.
The cutting of trees for firewood did not clear all the schlerophyll forest, and several major fires have affected Christmas Hills. A fire brigade was formed after the 1939 bush fires. In the same year at the western side of Christmas Hills the Light Car Club formed the Rob Roy Hill Climb, a venue for motor sports for well into the postwar years. In 1958 the Christmas Hills area was transferred from Eltham shire to Healesville shire. Two years later it was connected to the electricity grid, and in 1962 suffered a disastrous bushfire.
In 1972 several farms in Christmas Hills were served land-acquisition notices for a water storage on the Sugarloaf Creek. The project also involved a proposed Yarra Brae storage further south at Kangaroo Ground and Wonga Park. Protest stopped Yarra Brae, but the Sugarloaf reservoir was completed in 1980. It is also a recreational and boating site.
The former One Tree Hill mining area in the west of Christmas Hills is a forest reserve, and the Rifle Range Reserve is a little further north. The "township" has a memorial park, primary school, fire station, hall and tennis courts.
The area's proximity to Melbourne has attracted population growth in later years.
Marshall, Alan, "Pioneers and Painters: One Hundred Years of Eltham and its Shire", Thomas Nelson (Australia) Ltd., 1971, p. 48-50.
Woiwood, Mick, "Once Around the Sugarloaf", Bend of Islands
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