VIC Rural 1.6m vs 200k what's the difference?

Hello, there's a huge difference in price between these two rural properties:

- 1.6m / Type: House / 80Ha 32 Vivian Lane, Murrumbateman NSW 2582 - House for Sale - $1,650,000
- 200k / Type: Rural (with house permit) / 100Ha Lot 2 Goorangoola Creek Road, Singleton NSW 2330 - House for Sale - $195,000

Why such a difference? It seems like:

- Area: similar.
- Location: similar - no waterview, tiny water supply / dam in both cases, far from city.
- Zone: some difference "House" vs "Rural" (with house permit). In both cases it's allowed to build a house. Cheap property may require additional permission for some farm activities.
- Beautiful views: kinda the same.
- Buildings: the expensive property has house, but it's a cheap house-kit costing maybe 150k$. There are also some other sheds and some infrastructure but it's also not a game changer.
- Power line / water supply - nothing on cheap property, could be a deal breaker for some activities.

That's pretty much all the differences I could find. In my understanding it's still unclear why one property cost almost x10 times more. What do you think? What did I missed?

 

Hi Lily12, there really isn't any comparison between those two properties. I think you might be looking at the location displayed on Domain which is wrong.

I don't mind doing the comparison because I'm looking for rural property myself and it's a good exercise .

It's actually an hour out of Singleton and looks like this.




Short version:
* Property 1 is a fully operational farm on near level ground, fully setup to generate income and within an hour of a capital city (Canberra).
* Property 2 is an steep and undeveloped bush block in the middle of nowhere. Might be OK for farming weed.

Area: Similar in size, yes, but Property 1 is fully accessible and developed for production. Property 2 is wild and steep (it would be way steeper than it looks in the photos).

Location: Property 1 is in a known wine district only a few k's off the Barton Hwy and not much further to the Hume, as above near Canberra. Property 2 is in a wild and remote area quite some way off the bitumen, the ad says "4x4 recommended".

Zone: Property 1 is "RU1 - Primary Production", Property 2 is "RU2 - Rural Landscape". I'm not sure of the practical differences, someone else might be able to summarise.

Buildings: I think the house is reasonably good quality, I doubt that you could knock that up for $150k. Double that or more. Don't underestimate the time and money to develop facility, fences, etc.

Due to Property 2's location it won't necessarily be straightforward to build a certified dwelling. Look up Bushfire Attack Levels. Clearing significant native vegetation probably requires a Biological Assessment Survey. When it comes time to build, think about getting materials and tradies up a dirt track and such. It's not always guaranteed that you can build a dwelling either, get that in writing from council before purchase.

There's also an issue of finance when it comes to either of these properties. In the case of Property 1 it's clearly a property that can generate more than $20k p.a. income so it's likely that a commercial loan would be required. Property 2 might not need finance, if it did then the banks get nervous without power and water "facility". It has a limited market so they don't want to get stuck with it.

That's the objective comparison and why Property 1 costs so much.

Subjectively I'd pick Property 2, what a great place .

 

We recently did a similar comparison between two rural properties in SEQ along the same road.
The first property was at the top of the range, set up as an operational cattle farm with a magnificent homestead, most of the land was cleared, gentle slope, sheds, fences, dams the works. The other property was about 400 metres away, on an extremely steep block dropping away from the road, fully forested, major bushfire hazard, nowhere to put a house site, no water or power etc etc. Great view from the road, otherwise useless.

 

Thank you for the explanations!

* Property 1 is a fully operational farm on near level ground, fully setup to generate income and within an hour of a capital city (Canberra).
* Property 2 is an steep and undeveloped bush block in the middle of nowhere. Might be OK for farming weed.

True, makes sense, I was looking at it from the point of building a house in the wild in nice and quiet environment and somehow missed such obvious things as it's not ready for production and very steep.