When a 700sqm block isn't really 700sqm

We ended this inspection before it started. Here's the story.

When we saw a three-bedroom house on approximately 700sqm advertised for $650,000 in a suburb where houses can sell for around $1.2 million, our eyes lit up.

On paper, the corner block appeared to have enormous potential. An extension, subdivision or redevelopment immediately came to mind. Better still, the house appeared to sit towards one side of the block — exactly the sort of layout that can make subdivision much easier.

Subdivision was precisely what our client had in mind, so we shortlisted it.

But in our minds, something didn’t add up.

Fortunately, the property was local to us. We decided to swing past during lunch before spending any more time investigating it.

We arrived. We looked at the property. And we kept driving. We didn’t even bother getting out of the car.

Why?

The photographs of the property only showed half the story. Literally. The listing made the property appear to have a large amount of vacant land beside the house.

It certainly did.

There was just one rather important detail:

A massive high-voltage transmission tower was sitting on it.

Suddenly, the $650,000 asking price made a lot more sense.

Although the property may technically sit on approximately 700sqm of land, a substantial portion of that land was effectively unusable for the subdivision our client intended.

For our purposes, this wasn't really a 700sqm development opportunity. It was closer to buying a house on half a usable block, and with a transmission tower occupying much of the rest.

That completely changed the numbers.

Three-bedroom units in the surrounding area were already selling for roughly $600,000–$700,000. At around $650,000, the vendor was effectively asking buyers to pay close to normal market value for the existing dwelling, despite the significant limitation created by the transmission infrastructure.

For our client's strategy, it simply didn't stack up.

We passed. Literally.

We drove past the property and didn't even stop for the inspection.

Advantage of having a Local Buyers Agent Working for You

This is one of the advantages of having a local buyer's advocate on your side. Knowing the neighbourhood helps, but more importantly, we don't rely on listing photos and advertised land size alone.

A property can look exceptional on paper.

Sometimes one drive past tells you everything you need to know.