The number of home owners incorrectly pricing their properties has increased in 2012, with self-diagnosis on the rise, according to Propell National Valuers.
The company’s annual top ten list of factors that affect Australian residential property valuations has revealed comparable property prices, popular price brackets and the gap between the asking price and the sale price were the most common factors influencing the valuation process in 2012.
The more price related influencers showed a big change from 2011, when market trends and sales history dominated.
Propell National Valuers’ CEO Bart Mead says there’s been a noticeable shift in the property market from the previous year.
“We noticed an increase this year in sellers looking at the sale price of other homes in their area, and incorrectly pricing their properties. This…fails to take into account another property’s unique attributes and is based on a subjective view of what they think is better.”
Mead says there was also a definite shift in the behaviour of vendors in 2012.
“Traditionally, vendors would try to hang on to a predetermined price with little flexibility and room for negotiation, however our findings suggest they have submitted to market demands and sold at what buyers were prepared to pay. This comes down to the asking price versus the sales price, and there was a gap between the two in areas right across Australia. We have seen a noticeable shift from 2011 where presentation, renovations and proximity to desirable facilities were more dominant.”
Mead says location is no longer just about city or suburb, coast or bush, but rather, involved a more complex decision with a change in employment conditions.
“Property location has become a significant factor in valuations over the past year. Properties in inner cities are attracting renters who seek a more affordable and convenient lifestyle and the resources boom continues to attract investors in mining communities. While there is greater risk here, there are some areas worth considering which have drawn a demand, and therefore, improve marketability and sales.”
Propell National Valuers’ top ten factors that influenced valuations in 2012
1. The number of other properties on the market at the same time – when more comparable properties are available, the lowest price usually sells first. (Number 3 in 2011)
2. Price band – some brackets are more popular than others. (Number 6 in 2011)
3. Asking price versus sale price – many vendors will judge value on the sale prices advertised, but there is often a gap between asking prices and actual sale prices achieved. (Number 9 in 2011)
4. Similarity of properties - valuers can draw on a history of demand enabling easier assessment of value (Number 2 in 2011)
5. The rising or falling trend of the market and the time the property has been on the market (Number 1 in 2011)
6. Location – regional, suburban, metro, rural, mining and local environmental factors (Number 8 in 2011)
7. The strength of the competition – a property valuation must reflect the competing market (Number 4 in 2011)
8. Expansion/extension/renovation potential – depending on the property type and location, such capacity may be sought after or not. Someone wanting to demolish and rebuild will not pay extra for renovations to the existing building (Number 10 in 2011)
9. Presentation and care –a well landscaped front yard with a good fence will improve the marketability of a property - the photos will attract more people to attend open home inspections. (Number 7 in 2011)
10. Premises - storage, bathroom and kitchen - two of the biggest items that will add value to a property are a new kitchen and bathroom. Investors and owner occupiers repeatedly demand functionality and style in these rooms, and getting this right can help you sell your home quicker. Storage is also highly sought after (replaces unusual features in 2011)