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  • Writer's pictureReal Finance

The ultimate considerations for understanding property value

Updated: May 19, 2022

Check out our simple guide to understanding how property valuation assessors determine the price of property

If you're looking to buy, refinance, or sell a home, you may be curious to know how houses are valued.

What’s a property valuation?

Firstly, it’s important to know what a valuation is.

A property valuation is an assessment or report on a property’s market value. It’s based on numerous factors. These will be explored in greater detail, below. A property valuation is carried out by an accredited valuer. Valuers can work for a lender or independently.

When would you assess a property value?

There are various reasons why people to choose to assess their property value. The most common ones are:

  • When they’re looking to refinance their lending

  • When renovating a property (generally before they choose to sell)

  • When buying an investment property

  • In the instance of a relationship breakdown (divorce)

  • When selling a home

  • They’re involved in a shared ownership structure

Considerations of a property value report

The biggest considerations of a report are the past sale prices of the property (and surrounding properties), trends and forecasts, and projects that are set to occur within the location.

The greater the size of a property improves its valiation
The greater the size of a property improves its valiation

To help an assessor with these considerations, they’ll look at:

1. The size of the property

Generally, the bigger the property is (especially the land component), the greater it values.

The actual size of the home and useable internal space can add to the overall valuation.

Which leads into the next consideration…

2. The number of rooms

A major factor that influences the decision of people buying a house or buying an investment property is the number of rooms it has. Specifically, the number of bedrooms, bathrooms, and living spaces. The more there are, the greater it can value.

3. The fixtures and fittings

Fixtures and fittings that provide convenience for occupants can add to the overall cost of the property. Examples include air-conditioning, pools, garages, balconies, new appliances etc.

When buying brand new, full turnkey property it generally comes with these inclusions. Hence, why they value better when you sell for capital gains purposes.

4. The age and condition of the home

While this isn’t always the case, generally, new homes value better than older homes. This is because they’re usually in better condition and are less subject to maintenance and repairs issues.

Though, it comes down to the overall structure of the property and whether the condition is good.

5. Location

Location is an important factor for property valuations. Whether you’re buying an investment property or buying a house to live in, the greater the overall location is, the higher the price of the property.

Assessors consider location regarding its proximity to amenities like schools, public transport, retail, employment, and major infrastructure projects. The closer such amenities are, the greater impact it will have on the property value.

How the overall economy is performing can impact the value of a property. Valuers will consider matters like current interest rates and inflation.

Other considerations include:

7. Ease of access to the property

9. Building and planning restrictions within the area

10. Recent sale prices within the area

11. Renovation potential and if there’s areas for improvement

Consulting a finance specialist

Whether you’re looking to buy a new investment property, first home, owner-occupied home, or refinance, it’s recommended that you consult a finance specialist. Specifically, an REIF Finance Specialist.

With access to over 40 Australian lenders, we’ll be sure to find the most suitable assessor to valuate your property, dependant on your circumstances. To learn more, please feel free to reach out on the details that are provided below.

Ph: 1300 130 932


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