The true worth of a property can mean something different to everyone, especially when emotions are attached, but there still are a number of undeniable factors that can give one property a valuable edge over another.
Whether you're looking to buy or sell a property, understanding how it might be priced could make or break your decision to act.
Location. Location. Location.
It's not just a popular phrase - it's actually how most buyers search.
Proximity to amenities, a suburb's reputation, its vibe and whether local features like parks are well kept by the locals and council, can all make a significant difference to a property's value.
Special features also increase the value, such as whether a property is close to waterways, good schools, entertainment hubs or the CBD.
Of course, views and natural light add a great deal of value to properties, as well.
The size of a property will usually impact its price, because the space determines how many buyer types, such as families, a property will appeal to.
This is so important - employment opportunities in the area can act as a drawcard for future buyers. It also signals to people whether an area is likely to fall out of a favour if the unemployment rate is on the rise.
When unemployment rates are high and fewer people have jobs, people may simply not have the extra income to meet mortgage repayments or to invest.
Wages growth is another consideration. If wages are not growing in the economy or a local area then it is unlikely that people will be able to bid higher for property prices.
Keep a close eye on current and upcoming infrastructure activity in your target location. Developers behind these projects tend to do extensive research into the potential of the area, allowing you to piggyback off their insights. Infrastructure investments like transport, hospitals, educational institutions and retail shopping centres are all important ‘convenience' factors which add to the price tag of properties.
While residential construction is booming in some areas at the moment, as buyers take advantage of lower interest rates and apartment demand, it may not always be that way.
It's a good idea to assess how much new development is actually happening and whether it is focused on units or detached homes.
You should also consider whether there the future supply will surpass future demand - as this could weigh on property prices.
As we have seen in recent years, record low interest rates have driven up property prices in many popular areas.
Conversely, when rates are high, property prices tend to suffer so you should think about how future changes to interest rates may impact the value of the property.
The final factor to consider is the sale price of a similar property in the local area. Online property search websites can help you compare similar properties and give you a good idea of property values in certain areas.
If you're ready to start the buying process, give your local Mortgage Choice broker a call. They can find the loan that's right for you and then do all the legwork.