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What determines the market value of a home?

Author: One of the trickiest things to establish when putting your home up for sale is its estimated market value.

It is also one of the most important factors to establish, and perhaps the most imperative to achieving a quick and successful sale.

How is market value established?
To determine market value, you need to consider both the land value and building value.

Land value is the easier of the two to estimate because it is straightforward and isn’t impacted by variables. Whereas estimating the value of a building must take into account things like features and quality of structure and size, which can vary considerably from home to home within the same street or suburb.

As a general guide, here’s an explanation of contemporary attitudes to Western Australian homes and how they contribute to establishing property values.

Bedrooms
The number of bedrooms remains the most common way to describe a property. Over the last 50 years the number of bedrooms in the typical home has grown from two to four but the average household size has decreased.

Regardless of this shrinking household size, the desire for larger homes remains strong and the market tends to put higher values on four bedroom houses and three bedroom apartments. Extra bedrooms offer flexible lifestyle options, like being able to convert them into a home office or guest room.

Bathrooms
The number of bathrooms and toilets is second only to the number of bedrooms when it comes to buyer interest.

The market values a second bathroom and toilet or ensuites very highly due to the convenience and privacy they offer. Particularly where a home is shared with adults or leased to sharing tenants.

Storage
Storage is an underrated influence on value. We are living in smaller households but accumulating more possessions. Homes with plenty of storage space are likely to be more valued. Spare bedrooms can also be regarded as storage space.

Theatre room
The common ‘games room’ of the 1970s and 1980s has given way to the ‘home theatre’. Flat screen televisions with surround sound units and comfy chairs demand their own space and are an increasing requirement for buyers.

Car space
Having secure car accommodation is important to buyers, but it is generally considered a secondary consideration of importance to living areas.

Kitchen
Australia’s love affair with cooking programs illustrates how important the kitchen is viewed within a home. A well designed, functional and spacious kitchen with quality draws and cupboards, bench tops and appliances is an increasing priority for home buyers.

Alfresco area
WA’s warm climate practically demands the requirement for functional alfresco areas.

Whether it’s a simple social space with a modest outdoor setting, a classy barbeque area with a cedar-panelled patio or an integrated indoor-outdoor entertainment space, more and more WA home buyers are considering outdoor living spaces a necessity.

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