Market value tips from a local expert

By Jo Kennett

UNDERSTANDING WHAT affects the current market value of a particular property can help you negotiate with data-backed confidence, according to one local real estate expert.

Sales Consultant at Harcourts

BMG Jessica Otto said a market valuation “is an estimate of the current price of the property in the market and is often completed by a real estate agent.”

“The value of the property is based on market trends and recent sales (within six months) of similar properties in the area,” she said.

According to Jessica, there are ten key factors which affect the value of a property.

The first will come as no surprise.

“Location, location – the location of a property is the most obvious factor that affects how much a property is worth,” Jessica said.

“Is the property close to public transport, shops, schools, and restaurants? Is it in a sought-after beach front location?

“I am finding more and more buyers want the connectivity to where they work, if not from home but have a lifestyle where they can retreat after work hours and feel like they are on holiday away from the hustle and bustle; therefore in these areas properties will be more expensive.

“There is also the fact that some suburbs have a better reputation than others due to factors such as unemployment or crime rates.”

The second factor on Jessica’s list is population and demographic.

“The more people who want to live in a particular suburb, the greater the demand for properties there,” she said.

“At the same time, the type of people living in the area will also influence property values. For example, if young families are the dominant demographic group in the area, multi-bedroom houses will be more sought after than small apartments.”

At number three is supply and demand.

“Property prices will increase if demand exceeds supply in a given market,” Jessica told the Weekly.

“This is because more people are in the market for a smaller number of properties and the competition to secure a home drives prices up.”

The fourth factor is interest rates, a big factor after the Reserve Bank of Australia delivered a record 10th consecutive rate hike in early March despite calls from financial experts to pause rate rises.

“The good old interest rate conversation; as we have seen in the current market conditions, when people are uncertain, they may stand to hold,” Jessica said.

“Over the past two years, there have been low interest rates, which means buyers’ borrowing capacity is higher.

“With the past six months of interest rates rising, borrowing has become more expensive, which has corrected market growth and forced borrowers to tighten their belts.”

Property size and features is the next factor in determining property values.

“The features and overall size of a property also influence its value,” Jessica said.

“A four-bedroom house is likely to fetch more than a threebedroom house in the same area, while features such as extra bathrooms, garages, swimming pools, and entertaining outdoor areas can all impact property value.

“Additional features such as lowmaintenance lawns, and premium finishes will add value too.”

Jessica has age and condition as the sixth factor on her list.

“A newly-constructed home will have a higher price than surrounding properties built tenplus years ago,” she said.

“Also, don’t forget first impressions matter!

“How your house is presented from the outside can instantly add or subtract tens of thousands of dollars from its value.”

Renovations obviously help determine value too.

“Renovations do add value but remember to have the end goal in mind when renovating so you do not overcapitalise,” she said.

“A big-ticket item is an additional dual-living residence to rent out or Airbnb for an additional house income source.”

STREET, CHINDERAH