LARA FARM SELLS FOR $2.5M OVER ASKING PRICE:

Huge price for Lara farm — but it may eventually be worth $60m

A 63-HECTARE farm near Lara has smashed all valuations for the rural property after selling for more than $4 million.

The property at 490 Flinders Ave was valued between $1.4 million and $1.5 million when it was offered at a receiver’s auction on Saturday.

But the $4.015 million sale to a Melbourne-based land banker — more than $2.5 million above expectations — wasn’t on the cards, Richardson, Newtown agent Ken McDonald said.

If residential development is allowed on the site, it is capable of holding up to 1000 lots.

“It was always going to be unpredictable, but my predictions didn’t get into that territory,” Mr McDonald said.

“It was a receiver’s auction so we had to quote among others for the job and the only precedents I could find weren’t all that good for making comparisons because they were properties with houses and different infrastructure, or different zoning, or the likelihood of zoning changes,” he said.

“With the amount of inquiry that went along I thought, well I’m not going to fall off my perch if this makes $2 million,” he said. “But it didn’t take long to go past there.”

Mr McDonald said four bidders contested the property, though he knew of another five groups in the crowd that didn’t get a chance.

One hopeful buyer told the Addy that they were prepared to pay as much as $1.9 million.

Mr McDonald said the buyers indicated they were land banking in the area. But it would need to be a long-term hold because urban growth around Lara was leading in an entirely different direction.

He said the farm was threequarters of the way to the You Yangs. “I can’t imagine anything happening there for a long time.”

The property is north of Lara’s town boundary, its southern boundary separated from Serendip Sanctuary and land zoned for rural living by 1km of farming land.

The final bid for the property came on the fall of the hammer, with a recording confirming it was made before it was called sold.

Similar sized properties that are within zones capable of residential development have sold to developers for between $11 million and $25 million recently.

Auctioneer Peter Bell said the site was capable of holding almost 1000 house lots, which have a $245,000 median price on today’s market, but it won’t be in line to be rezoned for at least a decade.

“They can graze it for 50 bucks an acre per year, it’s a pretty good return,” he said.

“That land is worth $50 million to $60 million once it’s rezoned.”

“I can’t imagine anything happening there for a long time.” RICHARDSON, NEWTOWN AGENT KEN MCDONALD