The site of present day Healesville was surveyed in 1864, and the first land sales were held in June 1865.
A settlement at nearby Chum Creek had existed for two or three years, and had become a thriving base for men en route to the goldfields at Woods Point and Jericho. Stores were brought from Melbourne along the Yarra Track, unloaded at New Chum and transferred to pack horses to continue their hazardous journey to the diggings.
As thousands made their way to the goldfields it became obvious that a 'proper' road was necessary.
The route chosen avoided the flood-prone flats of the Watts Valley and kept to the higher ground to the south of the river where a new town was planned.
By 1866 over thirty business premises were operating in Nicholson Street, including six hotels, a post office, a saddlery, and a blacksmith.
Reference : History in the Hills - Sally Symonds.