Property Value

What is Property Value?

Property value, by definition, is known as “the present worth of the future benefits that arise from the ownership of a specific property.”

The value of real estate (or property) is realised and enjoyed over a long period of time, unlike most consumer goods which depreciate in value almost immediately after being purchased. Because of this reason, economic conditions and social trends (along with government regulations and environmental factors) must be considered in the process of property valuation.

FAQs about Property Value

What are the basic value concepts in property valuation?

There are four main elements that are considered when estimating the property value. They are:

Demand - the desire or the need for ownership of the property, which is also backed by the financial means to fulfil the desire.
Utility - the ability to satisfy the desires and needs of the property owners.
Scarcity - the finite supply of competing properties.
Transferability - the convenience or ease with which the ownership rights of the property can be transferred.

How is property valued in Australia?

Before you buy or sell a house, you should have a deep understanding of the value it holds in the current real estate market. Property valuation is more than just exacting a market value for the property. It’s also about ensuring that the seller gets the best possible deal for their property.

A thorough valuation comes as a detailed report compiled by an expert. The report is an indicator of the exact market value of the property. The International Valuation Standards Council defines the property market value as the estimated sale price in a transaction between a willing seller and a willing buyer.

This price will only be determined after both the buyer and the seller have acted prudently and knowledgeably, devoid of any compulsion or coercion.

What should you know about value vs. cost and price in valuation?

The value of a property is not necessarily the same as its cost or price.

While cost refers to the actual expenditure (such as for labour or materials), price is the amount that an individual is willing to pay for the property. Both cost and value can affect the property value, but they do not determine it.

Learn how to increase your property's value with the right maintenance, and how to unlock value from your investment through rental property renovations.

Disclaimer: The views, information, or opinions expressed in this blog post are for general information purposes only and should not be relied upon. We have not taken into account specific situations, facts or circumstances, and no part of this blog post constitutes personal financial, legal, or tax advice to you. You should seek tax advice from your accountant, specific to your situation.

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Property Value

What is Property Value?

FAQs about Property Value

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