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What is property valuation, and how much does it cost?

By Jack Dona ·
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A property valuation is necessary if you’re applying for a home loan or want to find out how much your place is worth. But what is a property valuation, how does it work, and how much does it cost?

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What is property valuation?

A property valuation is a professional estimate of the market value of a property and aims to identify what price it is likely to be sold for in the current market. 

Property valuations must be conducted by a Certified Practising Valuer (CPV) or member of the Australian Property Institute (API), for the valuation report to be legally binding.

Property valuation vs property appraisals

You may have also heard of the term ‘property appraisals’. These are similar to property valuations but are conducted by real estate agents and are usually used when you’re selling a property. 

One of the main differences between the two is the legal standing of each. Property appraisals are not legally binding. 

Also, a property appraiser won’t take into account as many factors as a property valuer, such as the style and quality of the fit-out, fixtures, and fittings. This makes it a less comprehensive estimate of the property value and explains why it’s often provided for free by real estate agents who want to help you sell.

When do you need a property valuation?

Property valuations are one of those things that you never really think about until you need one. Some of those situations can include: 

  • When you are purchasing a property and your lender wants to know how much money they need to lend you
  • When you’re about to buy a home and want to ensure you’re not paying too much
  • When you’re selling your property and want to set a fair asking price 
  • When you refinance and your lender needs an up-to-date valuation to help calculate your home equity.

How are property valuations calculated?

When assessing a property’s value, professional valuers take into account a range of factors, including: 

The building 

  • The property condition
  • The structure of the property 
  • The quality of the fit-out 
  • The number of rooms and types of rooms
  • The fixtures and fittings in the property
  • The ease of access to the property
  • The architectural style 
  • The building and land size 
  • The aspect, layout, and topography of the property
  • The property’s heritage status or conditions.

The location

  • The property’s location (i.e. suburb or region)
  • Recent sales in the area for comparable properties
  • The property’s proximity to amenities (e.g. transport and schools) 
  • The council zoning of the property 
  • Any planning restrictions that might impact renovations or extensions. 

How long does a property valuation take?

Property valuations typically take between a few days to one week. It may take one day to complete a full property inspection, then a few days to compile the full report.

How much does a property valuation cost?

The cost of a property valuation will vary depending on who conducts it. 

When you apply for a home loan, you can get a property valuation performed through your lender, who will organise it for you. According to Mozo’s database, the lenders we compare can charge anywhere from $0 to $360.

Read more about the costs of homeownership, or learn more about why property values are important for your loan-to-value ratio (LVR).

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Jack Dona
Jack Dona
RG146
Money writer

Jack is RG146 Generic Knowledge certified, with a Bachelor of Communications in Creative Writing from UTS, and uses his creative flair to cut through the financial jargon and make home loans, insurance and banking interesting. His reader-first approach to creating content and his passion for financial literacy means he always looks for innovative ways to explain personal finance. Jack's research and explanations have been featured in government publications, and his work is regularly featured alongside major publications in Google's Top Stories for Insurance.

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