The changes in Australia’s property market regularly makes headlines across the country, but what is it exactly that’s influencing property value? Is it naturally occurring (intrinsic) or is some outside force (extrinsic) affecting their value? Here we explain the ins-and-outs of what influences the value of your property.
Location!
The most obvious factor affecting your properties value is its location. Is it close to the city centre, on a waterfront location, is it close to public transport, shops, schools and restaurants? All of these and more – depending upon how close or far away your property is located to them – is going to positively or negatively affect your property’s value.
Supply & Demand
In a given property market, if supply exceeds demand property prices will decrease, or if demand exceeds supply property prices will increase. If there is more demand than supply, this means there are more people in the market for a smaller amount of available properties. In this instance, the competition to secure property is driving the price up.
Interest Rates
If the home loan interest rate from lenders increases, then the average monthly mortgage repayment will increase. This has a huge impact on housing affordability, so there will be less competition and property pricing will go down. The opposite is true if interest rates are cut down.
Economy
The economic performance will also have an impact on the property market. If the economy is strong and growing, more and more Australians will be able to afford to purchase property, leading to rising values.
Property Market Performance
Your property’s or potential properties local area market is also going to influence its value. If there is little to no demand for property within the neighbourhood and the properties for sale are selling for less than the asking price, you can expect your value to decrease.
Population & Demographics
The more demand for a particular suburb, the more value to that suburb. Also, the age and type of people wanting to live and already living in the suburb will be another influencer on its value. For example: if families are the dominant demographic in that particular suburb, multi-bedroom homes are most likely going to be the more sought-after property type.
Size & Potential
Of course, a four-bedroom home will generally be worth more than a two-bedroom home within the same area. Though additional features – such as if the two-bedroom has two bathrooms but the four-bedroom only has one bathroom – will affect the gap in value. Other such features like a pool, garage, outdoor areas, etc. will also affect the value. A property’s value is also influenced by the potential it presents to future buyers and investors. The rental income and other such factors are going to play a huge role in its potential.
Overall, there are many influencing factors that can affect your property’s value. It’s important that you do your due diligence by adequately researching and consulting with experts prior to purchasing.
