VIC Value of two similar properties: Templestowe vs Mitcham

Hi brain trust,

Can you analyse the following two properties which went to auction yesterday? The actual sold price is vastly different to what I expected. Can you tell me what did I missed?

Property A: 5 Joseph Street, Templestowe Lowever, listed $700-750k
5 Joseph Street, Templestowe Lower VIC 3107 | Domain

This has two big bed rooms, sitting in a very quiet and nice block. Land size: 385m2. It is old but it is a lovely home and in livable condition. I can see my family moving in immediately without having to carry out any major renovation. The property appears to be well maintained, walking distance to many facilities like woolies, medical centre. Very easy to get to CBD by express bus. I was prepared to pay 800+ for it but I skipped this as I bought a unit a few weeks ago). This one was sold in auction at $750k

Property B: 587 Whitehorse Rd, Mitcham, listed $660-720k
587 Whitehorse Road, Mitcham VIC 3132 | Domain
This is a 3-bed house, sitting next to the busy Whitehorse Rd, corner block, 440m2. The property is in terrible condition which will require serious renovation or needs to be knocked down (e.g. bath room and kitchen is unusale, mould everywhere in all bedrooms, ceiling looks like it going to collapse anytime)
As a FHB, I don't want it, but I can see the value of the land and think if someone pay 720-730 for it, then spend 100k on renovation, it can be sold for $900+ k. Turned out this one was sold yesterday for $866k

In term of location, I think the two are the same: taking the same amount of time to get to CBD using public transport, A can get to the airport faster, but B has access to train line. School catchment is exactly the same: excellent Primary school, good but not top-ranked Secondary.

 

Good point, I didn't see the value of B as a commercial property. Looking from google map, it makes sense.

 

Property B is a few blocks from where I live. I really wouldn't want a property there, unless it did have potential as a commercial property (for which this property really isn't ideal either).

Overall I'd say Mitcham has the better long term growth prospects. Your comments about location are correct, but the train line, Eastlink & proximity to Ringwood and Box Hill give Mitcham a bit of an advantage over the long term.

Templestowe is a little away from the main hubs (other than Doncaster). As traffic gets worse over the years, what was a Templestowe advantage may turn to a disadvantage. Long term there's a slight advantage to Mitcham, but there's really not much difference.

However looking at the two properties as residential, I'd prefer the Templestowe property simply based on the specific location (not on the main road but nearby) and condition of the property.

 

Have you looked in the mirror today?