Comparing Apples with Apples
Property prices are some of the most difficult numbers to pin down when comparing between two different properties as both are entirely unique. And even when assessing the value of the same property, you will almost certainly get two different figures from two different valuers!
So how does one go about determining if a particular property is fairly priced and good value?
Although by no means perfect or an exact science, the method that all real estate agents use when giving market appraisals and to a more stringent extent, valuers use is one of comparable stock. Comparable stock means using a series of existing properties in the area of the same type, similar size and roughly comparable location within the same suburb.
One of the best metrics to use when comparing two properties is the price per square meter. All developers price their projects according to this metric as there is a base cost to them to build on top of the land acquisition cost on a per square meter basis. A 2 bedroom apartment in one project may be priced more than another in the same area but could actually be better value for money if you looked at the price per square meter.
Another one to look at is the size of the outdoor space that is included. Although less valuable than interior space, an apartment with a 20sqm balcony is going to be worth more than one with a 5sqm one, all other factors being equal such as what level the apartment is on, aspect and interior size.
With house and land packages, compare what is included with the package, most are what’s called ‘turnkey’ packages that include everything such as landscaping and blinds, meaning it is tenant ready when they hand the keys over. Some packages marketed at very attractive price points do not have such inclusions, so keep those in mind when one price point looks more attractive than the other.
Size of the block of land will also be a huge factor as it will affect future growth for the property should you sell to a family that wishes to extend or put in a pool for instance.
Some consideration should also be placed on the level of the finishes, heights of the ceilings etc.
Try iBuyNew’s comparison checklist here for a comprehensive list of factors that should help you compare properties for yourself.
Published on 5th of September 2014 by Michelle Leftwich