How much is my house worth?

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on March 17, 2022 Fact Checked
How much is my house worth?

Ever wondered what your property is worth in today’s market? In this guide we’ll uncover the tools you need to find out just how much your home is worth before taking the next step in your property journey.

If you are looking to sell your house or wondering whether or not now is the right time, knowing how much your home is worth is key to planning your next step. The difficulty however lies in working out the actual monetary value of your property while being mindful of the fact that regardless of your home's condition, its value will be heavily influenced by the housing market as well as buying demand.

In this guide, we’ll look at:


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWSSPECIAL OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 26, 2022. View disclaimer.


How is my property's value calculated?

There are a number of different ways to value a property, from basic valuations using local sales and market reports to more in-depth valuations by agent appraisals, bank valuations and other desktop or automated valuations.

A property valuation is a detailed report of a property’s market value. The valuation report created by a qualified valuer is a legal document and used for a variety of purposes. When lenders are evaluating your mortgage loan application, they will need a valuation as proof of the value of the property you’re purchasing.

Property valuation considers a number of key factors that we will look at below.

Housing demand

Generally your property will be worth more if there is a shortage of housing in your area, coupled with high demand. On the other hand, if there is a lack of buyer demand in your area or too many houses on the market, your property’s value may result in a lower overall worth.

Local area pricing

Taking the opportunity to look at other houses in your area that are around the same size and have sold recently allows you to get a feel for your own property’s worth as well as analysing just how active the local real estate market is.

Objectivity is important when comparing your property to others in the area, as otherwise you may think that your property is worth more than it actually is. It’s important to also ensure you utilise local sales data from no more than 3 months ago, and if the market is busy be aware that 3-month-old data will be outdated.

Location

Location is a key determinant influencing property value. Generally speaking, a house near the CBD, in a popular coastal area, close to good schools or with easy access to public transport will be valued greater than a home on the outskirts of town with access to only a small number of resources.

While you cannot change the location of your property, it is important to be aware that the desirability of certain areas can come in and out of fashion, so your house could potentially be worth more now than it did when you first purchased it.

Property condition

The greater the overall condition of your property, the more value is added. This does not just account for the external condition of your house but also includes how structurally sound the property is. Reducing cracking, having strong foundations and a secure roof are features that make up a valuable property.

Size and layout

The size and layout of your property also plays a key role in determining its value. A property with more than one bathroom, multiple bedrooms and a cohesive overall layout will generally be viewed as more appealing and valued higher. In saying this, many buyers will choose location over size and layout, however it does depend on other factors such as the demographic interested in the property.

Why should I track the value of my home?

Tracking your property value allows you to obtain a greater understanding of the current real estate market, monitoring estimated value and learning about recent property sales for similar properties.

As you track home value in your area over time, you will begin to develop a sense of market trends in your area. For instance, if you notice that the selling price of homes similar to your own are increasing, you can typically conclude that the value of your property may also be on the rise. If homes similar to yours are on the market for longer and have a lower selling price, you may observe that the market value of your property may be decreasing.

Resources provided by CoreLogic and sites such as realestate.com.au and Domain allow home owners to track property values from the comfort of their own home. It’s important to remember searches are indicators of the current state of the market, not actual facts, so conducting research and consulting banks or registered property valuers can be a benefit to understanding your true property value.

Can property value impact my home loan?

Whether you are dipping your toes into the property market for the first time, purchasing a new home or refinancing, bank valuations are used to determine the loan to value ratio (LVR) in a home loan application. This will ultimately impact the amount that a bank or lender is willing to provide to fund your home loan. Bank valuations are for mortgage purposes only, therefore they shouldn’t serve as a reliable point-of-call for the state of the current property market and ultimately overall property value.

During the home loan application process, a bank or lender will assess the LVR of a borrower in order to determine their risk. Ultimately, the more equity a borrower has, the lower their LVR will be and the ‘safer’ they’ll be regarded. As property values increase so does home equity, being the difference between what a property is worth and the outstanding balance of any mortgage. For your home loan, increased property values and therefore increased equity may result in you being pushed into into a lower LVR tier, presenting an opportunity to refinance your home loan to a more suitable fixed or variable rate.

Read more: Choosing between a fixed or variable rate home loan

Savings.com.au’s two cents

It’s important to understand there’s no one magical figure to determine just how much your property is worth as the property market within each state or territory varies substantially. To help you determine just how much your property is worth, there are a number of factors to consider including housing demand, region pricing and location. Having an inner-city two-storey house located on the waterfront and close to amenities is always going to be worth more than a two-storey house located in a small country town far from resources - that’s just the way the market works.

A property valuation can provide you with the knowledge of your home’s potential worth, suburb trends and future growth potential in relation to real estate market trends. Keeping tabs on your property’s worth is important given recent property market movement as you may find significant value in refinancing, potentially saving you thousands over the life of your home loan.


Image by Naomi Hebert via Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

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