How to determine property value for your home (Ep.107)
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In this week’s episode, Dave, Cate and Pete take you through:
Using comparable sales refresher. The Property Professor takes you through how to select comparable sales and the elements of the property to rate for valuation purposes. Plus, important details on which properties are NOT comparable and should be removed from your analysis.
How old is too old? The trio discuss when it’s appropriate to use data from a year or more ago. While it may not be helpful in terms of a bank valuation, it can be useful for your own valuation purposes.
Twice the size doesn’t equal twice the value. The Property Professor explains the law of diminishing returns and why land size isn’t always proportionate to the cost per square metre. In essence, the price per square metre reduces, the bigger the land size. These reductions are not linear and are determined by what the market desires, specific to a suburb or micro location.
The art and science of valuing. While comparing apples with apples would make valuation a lot easier, it’s nearly impossible to do. Every property is unique, after all. A great example of this is how street frontage and ‘best and highest use’ could turn two seemingly identical properties, into distant cousins. Overlay subjective perceptions, the psychology of missing out and the mathematical science of valuation quickly turns to a fine art of nuances and finesse.
Live example of valuation. The Property Professor shares his methodology and reasoning behind valuing 20 Allen Avenue in Brooklyn Park which is going to auction the weekend after recording. The trio place their bets on the auction outcome. Stay tuned for our next episode to find out the result!
Watch the special video recording for a masterclass on determining property value.
Victoria the host of another Super Saturday. This past weekend, Victoria hosted more than 1,000 auctions, which is referred to as a ‘Super Saturday’, with a whopping 1,414 homes going under the hammer. This time of year, going into winter, this number is unprecedented for a Saturday of auctions. The influx of stock can be put down to the most recent Covid lockdown and also school holidays starting. We could possibly see more Super Saturdays in July once school resumes.
CBA the first lender to raise assessment rates. After APRA wrote to 14 of the biggest banks in the business, asking them to provide more data on their prudential practices, CBA was the first lender to raise their assessment rate from 5.1% to 5.25%. This is the first trickle of macro prudential regulation and APRA’s light touch, which is likely to increase over the coming months as the next dominos (lenders) start to fall in line.
Adelaide crowned the 3rd most liveable city in the whole world. The Economist Intelligence Unit’s latest Global Liveability Index, which considered factors including healthcare, education and infrastructure across 140 cities around the world, has named Adelaide as the third most liveable city in the world. Perth, Melbourne and Brisbane also made the top 10, while six of the top ten cities are in New Zealand or Australia, where tight border controls have allowed residents to live relatively normal lives (through COVID), the report states.
Cate Bakos – The Property Buyer’s Golden nugget: for all those people thinking about a development, it’s all well and good if you buy it yourself, move in, renovate it and enjoy it. But if you’re developing, you’re obviously taking into account making a profit. you need to be getting professional help to understand the value that you need to stretch to, or you could be cutting off some great opportunities.
Peter Koulizos – The Property Professor’s Golden nugget: spend 30 mins and do it yourself, if you’re really serious pay a valuer and get them to value it like a professional. What’s $200-300 to make sure you you’re paying market value. For each property you value, it will take you less time.
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