There are many factors that affect property valuation NSW. The most common ones include your house’s size, age, and neighbourhood. Then, there are factors such as natural disasters, the housing market, and climate change that have a potential negative impact. Supply and demand and the existing market trends are also big factors.
If you are concerned about factors that can decrease the value of your property, Romeo Property Valuers has this guide to answer your questions.
1. Climate Change
Climate change is currently the most debated topic on the planet and it is an important factor in the book of any residential property valuer. Its impact on your property’s value is more gradual in nature. When you purchase your home years ago, there may not have been a flood insurance requirement. Over the years, the flood-zone maps may have changed and now you may need flood insurance. Studies show that a single-family home can lose around 2% of its value if it comes under a floodplain area.
2. Supply & Demand
When real estate supply is greater than demand, you can expect your property’s value to fall. One of the factors that are currently driving home prices up in major markets is that the construction industry is unable to keep up with population growth. There is more demand for housing than supply.
3. Foreclosures
When there are a lot of foreclosures in your neighbourhood, they can have a negative impact on your home’s value. In fact, some studies suggest the drop in value can be as high as 10%. However, the good thing is that you have to be located close to the foreclosed property to experience a significant impact on the value of your home. This impact usually lasts for less than two years.
4. Mortgage Rates
The existing mortgage rates also affect the value of your property.
- Higher interest rates bring down property prices.
- A higher interest rate means higher monthly mortgage payments and thus reduces the number of people willing to purchase.
5. Natural Disasters
The number of natural disasters and the average death toll and cost have increased significantly over the past four decades. Recent natural disasters in an area can affect property value. If your property has been damaged by a natural disaster, it can have an even bigger impact on its value.
Some of the more common natural disasters that affect property valuations NSW include:
- Bushfire
- Flooding
- Dust storms
- Earthquakes
6. Neighbourhood
As indicated above, your neighbourhood can also affect the value of your property. Some of the sub-factors that play an important role in this regard include:
- Quality of neighbourhood schools
- Nearby business & amenities
- Crime rate
- Number of renters
- Proximity to public transportation
When you have an unkempt-looking neighbourhood, it can also decrease your property’s value. So, these are the most common factors that can bring down your property’s value. For more information, reach out to a residential property valuer at Romeo Property Valuers by writing to us.