If you have typed your Seville Grove address into one of those free online valuation tools, the number it gave you was probably not miles off. And that is exactly why it can cost you.

Seville Grove is not like the hills. It is a suburb of mostly standard homes on standard blocks, a lot of them built in the last couple of decades, with plenty of similar properties selling nearby. That is the kind of suburb where an automated estimate has the best chance of landing somewhere near the mark. So people trust it here more than they should anywhere else. Then they price off it, and they leave money on the table, because the one thing that number can never see is the thing that actually sets your final price.

Let me show you what I mean, with a home I sold right here in Seville Grove.

Why the estimate looks reliable here, and why that is the trap

An automated valuation works by looking at recent sales of similar homes nearby and doing the maths. In a suburb full of near identical homes on near identical blocks, it has plenty to work with, so it can get reasonably close on the bricks and mortar. That is fair enough.

But here is what it is really telling you. It is giving you an average. It is saying your home is worth about what the last few similar ones sold for. What it cannot tell you is what happens when you take an ordinary home and put it in front of the right buyers, presented properly, with a campaign built to make them compete for it. That depends on who turns up and how badly they want it, and no model can predict that.

The estimate prices the house. Buyers price the competition. Those are not the same thing, and the gap between them is where sellers in Seville Grove either win or lose.

A real Seville Grove example

I sold a home here in Seville Grove not long ago. A completely standard property, a one-storey home, three bedrooms, two bathrooms, on a block just under 500 square metres. Nothing unusual about it at all. It was the kind of home an online tool should get close to, because there are plenty like it in the area.

The automated valuation put it between $712,000 and $810,000, with a midpoint around $750,000. Honestly, that was not a silly range for the house on paper. I thought around $800,000 would likely be the top of it, and I told the owners that if we got to $850,000 we would be doing very well.

We guided it from $800,000 and ran it through our Select Date Sale® system. The owners did a terrific job getting it ready. They decluttered exactly the way I suggested, presented it beautifully, and the marketing we put together made it stand out from the other homes for sale in Seville Grove at the time.

We held the first home open and had 22 groups of buyers walk through. By the end of that day we had five offers, all of them in the mid $800,000s, already past the figure I thought would top it out. Then that evening a buyer who had asked to go and speak to their broker came back to me. By the time the dust settled, the owners had signed off on a sale of $907,700.

That is nearly $100,000 above the very top of the automated range, and more than $150,000 above its midpoint. On a standard suburban home that the computer should have had every chance of getting right.

Was that just a lucky day? No, and here is why

It is a fair question. One big result can look like a good day and two keen buyers. So let me be straight about what did and did not happen here.

What happened was not luck. It was a method. More than 730 sellers across the Perth Hills and Foothills have sold their homes using our Select Date Sale® method, and the whole point of it is to do deliberately what a private negotiation leaves to chance: bring the interested buyers to a set point at the same time, then let them put their best foot forward without knowing what anyone else has offered. One buyer on their own negotiates you down. Several buyers who each want the home, and each know they might miss it, compete you up. That is not a fluke you hope for. It is a process you can run on purpose.

What I will not tell you is that every home leaps a hundred thousand dollars past its estimate. That one did. Plenty do not, and I would be lying if I said otherwise. What the method does reliably is make sure that if the buyers are there, they compete, so you capture the top of what the market actually holds rather than settling with the first person through the door.

Wondering what a proper campaign could do for your home? A free appraisal will tell you both what it is worth today and what it could reach with real competition. Book yours here.

What actually moves the number on a standard Seville Grove home

Even in a suburb of similar homes, two places that look alike on a website rarely sell for the same figure. When I appraise a home here, the things I am weighing are:

• Condition and presentation, because in a market of comparable homes this is often what separates the top result from the average one.
• The floorplan and how it actually lives, not just the bed and bath count a website reads.
• Block size, orientation and whether the outdoor space is genuinely useable. Side access, parking, and shed or workshop space, which buyers out this way do pay for.
• Where in Seville Grove you are, because the better pockets, and proximity to schools, parks and transport, move the number.

An online estimate flattens all of that into an average. A local appraisal reads it on your specific home, which is where the real number comes from.

So how do you actually find out what your Seville Grove home is worth?

You get someone who sells here to look at it properly, and to be honest with you about two different things.

First, what your home is genuinely worth on the day, based on real local knowledge, not an average off a website. Second, and this is the part most sellers never get told, what it could reach if the campaign is run to create real competition rather than just to find a buyer. Those can be very different numbers, as that standard three by two showed. That is not something a computer can do, and it is not something an agent can do from behind a desk either.

Frequently asked questions

What is my Seville Grove house worth?
There is no reliable single answer from a website. In a suburb of standard homes an online estimate can price the bricks and mortar reasonably well, but it cannot account for presentation, the specific pocket you are in, or the competition a proper campaign creates, which is often where the real result comes from. The only accurate way to know is a local appraisal of your specific home.

Are online property estimates accurate in Seville Grove?
More accurate here than in the hills, because there are plenty of similar sales to compare against, which is exactly why sellers over-trust them. The estimate gives you an average of past sales. It cannot see what buyers will do when they compete for your home, and in a recent local sale that gap was more than $150,000 above the midpoint estimate.

How does competition increase the sale price?
A single buyer negotiating on their own has every reason to offer less. Several buyers who each want the home, and each know they could miss it, have every reason to put their strongest offer forward. Our Select Date Sale® method is built to bring those buyers to the same point at the same time so that competition can happen. More than 730 sellers across the Perth Hills and Foothills have now used it.

How much does a property appraisal cost?
Our appraisals in Seville Grove are free and come with no obligation. You get an honest figure for what your home is worth today, and an honest view of what it could reach with the right strategy, with no pressure to list.

Find out what your home is really worth

If you want to know what your Seville Grove property is genuinely worth in today’s market, not what a website guessed, get a proper appraisal before you make any decisions. You can also read more about the area in our Seville Grove suburb guide.

We are based right here in the area, we have sold across Seville Grove and the wider Foothills since 2002, with more than 1,500 sales, and we hold a 4.9 star rating on Google across more than 160 reviews and 4.9 on RateMyAgent. We will give you an honest figure and an honest strategy, not the number that sounds nicest to win your listing.

It is free, and there is no pressure. It is backed by our Best Service Guarantee.

Call the office on 08 6254 6333, or get in touch with me directly. Book your free appraisal today.

Truth. Strategy. Sold.

This article is general information based on more than two decades of selling property across the Perth Hills and Foothills. It is not formal valuation or financial advice. Every property and every market is different, and the figures in the example above relate to one specific sale. For a figure you can rely on, get an appraisal of your own home.

What is your Kelmscott property worth? It sounds like a simple question, and in plenty of suburbs it is. In Kelmscott it almost never is.

Unlike suburbs where the homes are much of a muchness, Kelmscott has an enormous range of property. You can have a modest brick-and-tile home on a standard block, a character home on half an acre, a redevelopment site with subdivision potential, or a lifestyle property tucked up in the hills. Two homes only a few streets apart can differ in value by hundreds of thousands of dollars.

That is exactly why an online estimate can lead you badly astray here. Since 2002, across more than 1,500 sales in the Hills and Foothills, the most expensive mistakes I see come from people assuming every Kelmscott property is valued the same way. This article explains what really determines value in Kelmscott, where the online number is roughly okay and where it falls apart, and how to find out what your home is genuinely worth before you make any decisions.

Where online estimates are okay, and where they fall apart

Let me be straight with you. An online property valuation can be genuinely useful on a standard suburban block, but in parts of Kelmscott it can also be seriously misleading.

If you are in central Kelmscott on a standard block, surrounded by similar homes that have sold recently, an automated estimate can land somewhere in the ballpark. The model works by comparing recent nearby sales of similar properties, and where there are genuinely similar properties, it has something to work with.

The trouble is that even in central Kelmscott the estimate misses the thing that often matters most, which is potential. And the moment you move off a standard block, into the hills, onto acreage, or onto anything with development upside, it stops being a guide at all. There are simply too many variations for a model to read, and it has nothing genuinely comparable to measure your property against. That is when it can be out by hundreds of thousands of dollars. Let me show you exactly that.

A real Kelmscott example

I sold a home up in the Kelmscott hills, on about three acres. The automated valuation system put it at $885,000.

The reason the model was so far out is simple. Going along that street, the other properties are ordinary residential homes on blocks of around 700 to 800 square metres, and that is what the system compared it to. But this was nothing like those homes. It sat on three acres with 180-degree uninterrupted valley views, high raked ceilings, a genuine character feel, finished beautifully throughout, and it had mains water connected, which is not a given on a hills block.

We put it on the market from $1,100,000 using our exclusive Select Date Sale® system. We held the first home open four days later, and around 48 groups of buyers came through by the Sunday night. The driveway alone winds for around 200 metres, and we had a traffic jam in it and out onto the street. By the end of that weekend we had five offers, and it sold for $1,300,000.

That is roughly $415,000 above the automated number, and $200,000 above our own starting figure, on the same street the algorithm was comparing it to. There is no automated system on earth that gets that property right, in any market, because everything that made it valuable was invisible to the model.

And here is the distinction that matters most. A valuation, automated or otherwise, only estimates value. Competition between buyers is what determines where the final price actually lands. Five buyers all wanting the same one-of-a-kind home is what carried it to $1.3 million, and no model can predict that.

If you are wondering whether your property is one of the ones online estimates get wrong, you can request a free appraisal and we will explain exactly why, with no obligation.

Kelmscott is several markets, not one

The big valuation mistake is treating Kelmscott as if it has a single median value. It does not. It is really a few distinct markets, and which one you are in changes both your buyer and your number.

Central Kelmscott, close to the station, schools and shops, draws families, first-home buyers and investors, and this is where an estimate is most likely to be roughly right, with the big exception of development potential.

The hills-side around Clifton Hills draws lifestyle buyers who pay a premium for elevation, outlook, trees and quiet. Here estimates are weak, because no two blocks present the same way.

The larger hill blocks further out, on the southern side of Canning Mills Road and around Buckingham Road and the Canning River, run from around half an acre up to some of about ten acres. These are lifestyle purchases as much as homes, and they are the hardest of all for a model to value.

And the redevelopment and investment pockets are where the zoning, not the house, is the story. A site with the right zoning can be worth well beyond its value as a place to live.

The part the estimate never sees: development potential

Even on an ordinary central Kelmscott block, the question that can move your value the most is whether the block can be subdivided, and an online estimate has no idea.

As a rough rule of thumb, the things I look at are whether there is side access of around four metres, whether there is enough useable land at the rear, in the order of 350 to 380 square metres including the driveway, and how close the property sits to the train station, because being within around 800 metres of the station can matter. None of those are hard-and-fast rules, they are simply the kind of things that flag a block worth investigating. The actual subdivision rules depend on the zoning and the current planning requirements, and they must be confirmed with the City of Armadale before you rely on them.

These are only indicators that tell me a property deserves a closer look. Some properties that do not meet every one of them can still have development potential, and others that tick every box may not. Every property has to be assessed individually, which is exactly why an online estimate, which assesses nothing, cannot tell you whether yours has any upside at all.

I have seen what this is worth. Two neighbouring blocks I sold had been valued by three other agents at $500,000 to $550,000 combined. They had all valued the houses. A zoning change meant the land could be redeveloped, and the two sold together for $1.2 million. The houses were exactly the same. The zoning had changed. If you do not know what your block is zoned and what it could become, you do not yet know what it is worth.

What buyers are really paying for

In much of Kelmscott the house is only part of the value. Depending on where you are, buyers are paying for the block size, the zoning and any subdivision or development potential, the hills position and the views, useable land, sheds and workshops, privacy, mains water, the character and feel of the home, and proximity to schools, transport and shopping.

Every property is a different combination of those things, which is precisely why no calculator can weigh them, and why two homes that look similar on paper sell for very different prices. The three-acre home did not reach $1.3 million by chance either. It got there because enough of the right buyers were brought together at once that they had to compete for it, and an algorithm cannot see that competition coming. A local agent who knows the buyer pool can.

If your question is whether to spend money improving any of this before you sell, that is its own decision, and our guide on renovating before selling walks through how to tell the improvements that pay from the ones that do not.

So what is your Kelmscott property worth?

The honest answer is that it depends, and not because agents like dodging the question. It depends because every Kelmscott property is a different mix of house, land, zoning,  position and buyer demand, and those are the things that decide the final price. The only way to know your number is to have someone assess the home, the land, the zoning and the current market together, in person.

Frequently asked questions

What is my Kelmscott house worth?

There is no single answer from a website, because Kelmscott is several markets in one suburb. A central block, a hills home, a lifestyle acreage and a development site are all valued differently, and the same suburb median can be wildly wrong for any one of them. The only reliable way to know is a property appraisal in Kelmscott that looks at your specific home, land, zoning and current buyer demand.

Are online property estimates accurate?

Sometimes roughly, sometimes badly wrong. On a standard central Kelmscott block surrounded by similar recent sales, an online estimate can land in the ballpark. In the hills, on acreage, or on anything with development potential, it has nothing comparable to measure against and can be out by hundreds of tthousands of dollars, as the three-acre example in this article shows.

Does subdivision potential increase value?

It can, significantly, because a developer or investor may pay well beyond a property’s value as a home. But potential has to be real and confirmed. Whether a block can actually be subdivided depends on its zoning and the current City of Armadale planning rules, so it should always be checked before you rely on it.

How much does a property appraisal cost?

Our property appraisals in Kelmscott are free and come with no obligation. You get an honest assessment of what your home is worth and why, including any potential in the block, with no pressure to list.

Find out before you assume

If you are even thinking about selling, the most valuable thing you can do first is get the block assessed properly, before you assume your home is just another Kelmscott house, and before you set a price off a website.

We are based right here in Kelmscott, we have sold across this suburb and the Foothills since 2002, and we hold a 4.9 star rating on Google across more than 160 reviews and 4.9 on RateMyAgent. We will tell you what your property is genuinely worth, including any potential in the block you may not know is there, and we will be honest about it.

It is free, there is no pressure, and it is backed by our Best Service Guarantee.

Call the office on 08 6254 6333, or get in touch with me directly. Book your free Kelmscott property appraisal today.

Truth. Strategy. Sold.

This article is general information based on more than two decades of selling property in the Perth Hills and Foothills. It is not formal valuation, planning or financial advice. Subdivision and development potential depend on zoning and current planning rules and must be confirmed with the City of Armadale. The figures in the example relate to one specific sale. For a figure you can rely on, get an appraisal of your own property.

Every week, sellers in the Perth Hills contact me with a number in their head. Sometimes the number is from realestate.com.au. Sometimes it’s from Domain, Cotality, or a link their bank sent them. Sometimes it’s from all of them — and the numbers are $100,000 apart from each other.

So how accurate are online property valuations, really? After more than two decades selling homes across Bedfordale, Roleystone, Kelmscott, Mount Nasura, Mount Richon and Seville Grove, the honest answer is: it depends entirely on the property, the suburb, and what the algorithm can and can’t see.

In some cases, the online estimate is close enough to use as a rough starting point. In other cases, it’s out by hundreds of thousands of dollars. And the difference between those two outcomes is almost never something the seller can predict from looking at the website.

Let me show you three real examples from properties I’ve sold.

Three Properties Where the Algorithm Got It Badly Wrong

Churchman Brook Road, Bedfordale

Both realestate.com.au and Cotality valued this property at around $1.2 million.

We listed it from $2.5 million. It sold for $3.1 million — almost $1.9 million above the automated estimate.

What did the algorithm miss? Three things that completely changed the value of the property:

– The block had mains water connected, which is rare on acreage in this area
– It was subdivisible into three separate blocks
– The blocks were dead flat — meaning the earthworks cost for any future subdivision was a fraction of what it would be on a sloping block

No algorithm can read a contract of sale, walk the land, check a deposited plan, or assess subdivision potential. It can only see what’s in the public record about square metres and recent sales. So it valued a near-million-dollar opportunity at the price of a standard residential block.

Urch Road, Roleystone

The automated valuation systems had this property at around $800,000. We listed from $900,000. It sold for $1.1 million.

The algorithm missed two things that any buyer noticed within ten seconds of walking through:

– Stunning views down the valley
– An exceptional internal finish — the kind of presentation and detail that makes a buyer want to write a cheque on the spot

You cannot put a price on the feeling a buyer gets when they walk into a beautifully finished home with a view they fall in love with. No algorithm can see views. No algorithm can see craftsmanship. They see square metres.

Blackwood Drive, Mount Nasura

Automated valuation: $750,000. We listed from $800,000. Sold for $926,000.

This property was:

– Fully renovated — exceptional presentation
– Had outstanding views
– Walking distance to local primary schools
– On the main bus route

Walkable schools, transport convenience, and a fully refreshed home are all factors that drive premium buyer demand. Algorithms don’t measure school catchments by walking distance. They don’t grade renovation quality. They average everything out.

How These Algorithms Actually Work

To understand why the algorithm gets it wrong, it helps to know what it’s actually doing under the hood.

Most automated valuation models (AVMs) work on a fairly simple formula. They take:

– The square metreage of the home’s living area
– The block size
– Land valuations of comparable blocks that have sold nearby

Some systems also use a build-cost-per-square-metre approach minus a depreciation figure, similar to what a licensed valuer might do.

Where this works reasonably well: cookie-cutter suburbs where the homes are nearly identical. A 220-240sqm four-bedroom-two-bathroom home on a 500sqm block in an estate where the only real differences between properties are paint colour, floor coverings and furniture — the algorithm can get within a workable range.

Where it falls apart: the Perth Hills, and any suburb where the homes are genuinely different from each other.

Here’s a partial list of what the algorithm cannot see on a Hills property:

– Whether the block is level or sloping — and how steep that slope is
– Side access — yes or no
– Views — and crucially, whether they face west into the afternoon sun or north toward the city
– Water connection — mains, tank, or bore
– Whether the property allows you to keep pets, horses, or livestock
– Whether you can store trucks or run a business from the property
– The presentation and finish of the home
– The quality of the street and the surrounding area
– Whether there’s a workshop — and if so, whether it has power, and whether that’s three-phase or single-phase
– Pool, established gardens, usable outdoor space
– Proximity to schools, hospitals, transport
– Which buyer group the home actually suits — first home buyer, upsizer, downsizer, or renovator

None of these factors appear in any AVM. Yet in the Hills, every single one of them can shift the sale price by tens of thousands — sometimes hundreds of thousands — of dollars.

There’s one more critical limitation worth understanding. AVMs rely on comparable past sales as the backbone of their estimate. But the algorithm can’t see what those “comparable” properties were actually like inside, in condition, in view, or in any of the factors above. So it’s comparing a flattened version of your home to a flattened version of someone else’s. Two unrelated properties are forced into a comparison they were never actually similar in.

Which AVMs Are Best — and Which Are Worst?

Honest answer: they’re all unreliable, but some are worse than others.

In my experience selling Perth Hills properties, the more useful ones tend to be Cotality (formerly CoreLogic) and realestate.com.au. They’re not accurate enough to base a pricing decision on, but they at least sit closer to reality more often than the alternatives.

The worst ones are usually the in-house systems some banks have built. These often produce numbers that bear no relationship to the actual market — and worryingly, banks then use those numbers for finance and bridging loan decisions.

There’s another problem worth knowing about. Run the same property through the same AVM on two consecutive days and you can get completely different numbers. I’ve seen properties where one day the AVM says $900,000 and the next day it says $1.2 million. That’s not a small error — that’s a $300,000 swing on a property that hasn’t physically changed.

I know one property in our area that recently sold for $3.5 million. The AVM for that property today, AFTER the sale has been recorded in the public register, still says $1.5 million. The algorithm can’t even self-correct from publicly available sale data.

The Algorithm Doesn’t Even Agree With Itself

Here’s something easy for you to test on your own property right now. Look up your home on any of the major AVM sites, and you’ll see they don’t give you one number — they give you a low estimate, a high estimate, and an “expected” price in the middle.

That range is often 10% to 20% wide.

On a $900,000 property, that’s a spread of $90,000 to $180,000 between the algorithm’s own low and high figures — for the same property, on the same day, from the same system.

Think about what that tells you. The algorithm itself isn’t confident in its own answer. It’s giving you a band so wide that you could drive a truck through it, and somewhere inside that band is supposedly the value of your home.

If the system that built the number isn’t sure to within $100,000-plus, why would you make a six- or seven-figure decision based on it?

Even the AVM Companies Tell You Not to Rely on the Number

This is the part most sellers never read.

I’ve called these AVM providers directly when I’ve seen valuations that were significantly out. The standard response, every time, is essentially the same:

“It’s only an algorithm working on the square metreage of the house and the block. Our terms and conditions clearly state that the valuation should not be relied on for the value of the house, or as a market value for a bank.”

Read that again, because it’s important.

The companies that produce these AVMs explicitly disclaim, in their own terms and conditions, that the figure should not be relied on to value your home — and not relied on by banks as a market value.

It’s in writing. You can go and read it yourself on any of these sites. Look for the fine print at the bottom of the valuation, or in their terms of use. The disclaimers are there.

If the people who built the tool are telling you not to trust the number, that should be the end of the conversation.

The Real-World Consequences of Trusting an AVM

This is where it stops being theoretical.

Underpricing — costing you tens of thousands. Some agents will use a low AVM as cover for listing your property cheap so they can sell it quickly. Convenient for them. Expensive for you.

Overpricing — costing you the sale. It’s not always that AVMs come in low. Sometimes they come in exceptionally high. A weak agent will see your inflated AVM and say “well, let’s try that price and see how it goes” — without explaining what happens when a home sits on the market too long. Your home goes stale, buyers wonder what’s wrong with it, and you end up below where you should have been.

Insurance underinsurance. If you insure your home at the AVM figure and your home needs to be replaced after fire or flood, you could be $200,000-$300,000 short of what you need. In the Hills, site works alone can range from $100,000 to $250,000 depending on slope and access to services — before you’ve even laid a brick.

Tax consequences. This one catches sellers regularly, particularly on acreage properties. Here’s a typical example, and please remember this is general information only — not tax advice — and you must speak to your accountant before making any decisions.

If you have a 10-acre property and it’s your principal place of residence, the first 5 acres are tax-free, and capital gains tax applies to the other 5 acres. The AVM gives you one number for the whole property. But a skilled agent can break that down properly: the house block might genuinely be worth $750,000-$850,000 on its own, and the back block (especially if landlocked) might be worth significantly less than half the total. Splitting the AVM number in two evenly — which is what many people do — can mean paying tax on money you didn’t need to.

Family disputes and divorce. AVMs hold no weight in court. If your property is part of a settlement, the court will require a licensed valuation, and often will ask for three real estate agent appraisals as well. The AVM is irrelevant to the actual legal outcome — but I’ve seen sellers and their families make poor decisions in the meantime based on those numbers.

A Cautionary Tale from Roleystone

A while back I appraised a property for a woman in Roleystone who was downsizing.

Her daughter was helping her with the sale. The daughter had already taken out bridging finance on a property in another suburb based on the bank’s valuation system, which had the Roleystone home at $1.1 million to $1.2 million. The agent they were leaning toward had appraised it at $1.25 million.

I appraised it at $850,000 to $900,000 — which is genuinely where the market sat for that property.

The daughter would not accept my appraisal. She trusted the bank’s valuation system. They went with the agent who matched the AVM.

The property went on the market at $1.25 million. Four months and multiple price drops later, it sold for $875,000.

That’s below the bottom of my original appraisal range. The home went stale chasing a number that was never real. Meanwhile the family had four months of bridging finance interest stacking up on the daughter’s other property.

Everyone in that family was acting in good faith. The daughter was trying to protect her mum. But the AVM and the agent who matched it caused real, expensive damage.

So What Should You Actually Do?

If you’re thinking about selling, here’s the honest path forward.

Use AVMs only for very early curiosity — say you’re 12 to 18 months out from selling and you just want a rough sense of where the market sits. Even agents look at AVMs to see what buyers will see when they search your property online. So they’re not useless. They’re just not the basis for a decision.

When you’re getting serious — typically around six months out, sometimes sooner — get at least two, ideally three real estate agent appraisals. Free, no obligation, takes 15-30 minutes per agent.

Do not pick the agent who quotes the highest number. This is the single most important point in this entire article.

Many agents are trained in a technique called conditioning. They tell you what you want to hear to get you to sign up for 90 or 120 days. Around week six, they tell you the market has changed and you need a “price adjustment.” Now your home has been on the market for six weeks with the wrong price, it’s gone stale, and you’ve lost negotiating leverage.

A well-priced home in the Perth Hills should sell within three to four weeks. If it’s not selling in that window, the price was wrong from the start — and the agent who told you the high number knew it.

The right pricing strategy is to meet the market — or, even better, to price slightly below the market to create genuine buyer competition.

I’ll be blunt about something most agents won’t say out loud:*you and the agent don’t set the price of your home. The buyers do. There’s no retail price on a property. There’s no manufacturer’s recommended figure. If an agent guarantees you a specific price, they’re either lying to win your listing or they don’t understand the market.

What you can do is set up a process that lets buyers reveal what they’re actually willing to pay.

Why the Select Date Sale® Method Solves This Problem

Buyers buy on feeling. They walk in the door, and they either fall in love with the home or they don’t. No algorithm captures that. No fixed asking price captures it either.

Our Select Date Sale® method is built specifically to solve this. It lets buyers compete with each other to pay what THEY are willing to pay — without knowing what other buyers are offering.

That last part is the critical mechanism. In a normal sale process, if a buyer knows what other buyers have offered, they only need to bid slightly higher. You never find out what they were actually willing to pay. The gap between “slightly higher” and “their genuine top price” can be $10,000, $20,000, $30,000 — sometimes $100,000 or more.

The competition should be between the buyers. Not between you and the buyers.

In a traditional sale, the buyer offers low, the agent suggests meeting halfway, the seller agrees, the buyer pushes again, halfway again — and three rounds of “halfway” later, you’ve quietly given away 10-15% of your home’s value. You weren’t negotiating with the market. You were negotiating against yourself.

Select Date Sale® takes the seller out of that fight. The buyers compete blind. The market reveals the real number — which is almost always significantly higher than the AVM, and often higher than even the most optimistic agent appraisal.

The Bottom Line

Online property valuations are okay for a very rough idea. They’re built on data and algorithms that can’t see most of what makes a home valuable — and in the Perth Hills, that’s almost everything. They can be 10%, 20%, or even 50% out from the actual sale price.

So why wouldn’t you make a phone call?

A real appraisal from an experienced local agent takes **15 to 30 minutes**. It costs you nothing. You get a properly considered figure based on what your specific home is actually worth in today’s market — including all the factors no algorithm will ever see.

Get a Real Answer from a Real Agent

If you’ve got a number in your head from an online valuation and you’re not sure whether to trust it — give us a call, send an email, or drop a text.

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Brendan Leahy, Naked Real Estate

 08 6254 6333
brendan@nakedrealestate.com.au
Unit 1/198 Brookton Highway, Kelmscott WA 6111

Truth. Strategy. Sold.

Our demographic shape is changing; there are six distinct buyer segments in our Australian property market:

1. young renters;
2. first home buyers;
3. upgraders;
4. downsizers;
5. retirees; and
6. the aged care market.

Looking ahead, the demand from young renters and upgraders is set to decline; while that from aged care will likely remain steady.

The stand out groups (those set to be the main drivers of Australia’s housing demand over the next ten years) are first home buyers; those downsizing and retirees.

It may surprise some, but first home owners are generally aged 35 to 44 years.

This group is projected to take up 20 per cent of our total new housing demand over the next decade.

What first home buyers are looking for in a property is the room to grow and the opportunity for property improvement. And naturally, affordability is a big consideration.

Preferred housing options for first home buyers vary, depending upon the location.

Some first home buyers opt for inner city apartments; some look to townhouses/duplexes and small houses in middle suburbs; and some prefer larger detached and dual-income homes in outer suburbs.

The downsizer demographic refers to those aged 60 to 74 years.

Almost all of this group (92 per cent) have no children living at home; while just on three-quarters are couples or live alone.

Downsizers are projected to take up 32 per cent of total new housing demand over the next decade.

Their preference is to remain in the same neighbourhood, close to friends, family and established ties.

What they are looking for is low maintenance; convenience; like-minded residents; and small projects.

Some from this group are looking to experience inner city living – their preference is for spacious, well-priced, quality apartments.

This group also prefers compact housing like townhouses; villas and dual-income homes in both middle ring and outer ring suburbs.

Understanding Australia’s real underlying housing need is more than just a matter of calculating population growth and average number of people per household.

Demographics will determine our future:

It’s our demographic profile – the change in our household formation – that will best determine future housing need.

But the right housing will need to be built; and importantly, at the right prices, in order to encourage key buyer groups to purchase.

At issue is lack of diversity in Australia’s housing stock, and the ability for most to afford their housing preference.

Over the past 25 years, the median house value nationally has risen by 412%, or $459,900.

Twenty five years ago, the median house value across Australia was just $111,524 and units showed a slightly higher median value, at $123,840.

Since 1993, median house and unit values have increased by 412% and 316% respectively, providing home-owners with a significant wealth boost.

The capital gain over the past 25 years equates to an annual growth rate of 6.8% for houses and 5.9% for units and in dollar value terms.

The median value of the typical Australian house has risen by $459,900 since 1993 and unit values are $392,000 higher.

But, as always…long term annual capital gains have been reasonably diverse across the capital cities, with growth in house values ranging from 5.9% per annum in Adelaide and Brisbane to 8.1% in the Melbourne property market.

Across the capital city unit markets, annual growth rates have ranged from 4.1% in Darwin to 6.6% in Melbourne.

In dollar terms, the Sydney property market stands out, with the average annual increase in house and unit values equating to $34,426 and $23,594 per annum respectively over the past twenty five years.

The diversity in growth rates over a long period of time highlights the cyclical nature of the housing market, with dwelling values rising at different speeds from region to region and period to period.

For example, despite the Brisbane housing market recorded one of the lowest rates of annual capital gains, the period between 2001 and 2004 saw Brisbane house values rising at more than 10% per annum; the lower rate of long term growth is largely attributable to softer conditions since 2010.

Demonstrating the difference in values between now and 25 years ago, in 1993, 98% of all house sales nationally transacted at a value under $400,000 and only 0.2% sold for more than $1 million.

Over the past twelve months, only 29% of houses nationally sold for less than $400,000 and 16% sold for at least $1 million.

Across Australia’s highest priced capital city, Sydney, twenty five years ago only 0.8% of houses sold above the $1 million mark, whereas over the past year 50% of all house sales had a price tag of at least $1 million.

What could the future hold?

If property prices were to rise at the same rate as the past twenty five years, Australia’s median house value would reach $2.9 million by 2043.

While the past isn’t always the best predictor of the future, it’s a worthwhile benchmark to consider where housing values may be twenty five years from now.

Based on national house values rising at the annual rate of 6.8% per annum over the past quarter of a century, in 2043, the national median house value would be approaching the $3 million mark ($2.93) and the median unit value would be just over $2.1 million ($2.15).

While it’s hard to fathom, if we saw the same rate of capital gains as what was recorded over the past twenty five years, Sydney’s median house value would be $6.35 million in 2043 and the typical unit would be worth $3.47 million.

Melbourne’s median house value would be approaching $6 million ($5.82) while the median house value in Brisbane would be $2.24 million.

Obviously these simple extrapolations don’t take into account how economic and demographic conditions might play out over the next twenty five years or how housing demand and supply may evolve; so there is a real possibility that housing trends and growth rates could look remarkably different to what we’ve seen over the past twenty five years.

Some more interesting findings from the Aussie Homes Loans Report:

Strong housing market conditions have boosted household wealth over the past quarter of a century.

The housing market has shown some extraordinary changes over the past twenty five years, with conditions moving through five distinct growth cycles which have pushed national median house values 412% higher.

Over the same period, the ASX All Ordinaries index has risen by a substantially lower 261%.

While value growth has been remarkably diverse across the country, over such a long period of time, the cyclical differences in value growth and turnover have washed their way through the statistics.

Each of the capital cities have recorded annual growth in house values ranging from 5.9% to 8.1% over the past 25 years, while regional markets have generally shown a slightly softer outcome.

Twenty five years ago the typical house value nationally was just $111,500 and since that time values have risen by an average of 6.8% per annum to the current level of $571,400.

The typical Australian property owner who has held their house for the past 25 years would have seen an average dollar value increase of almost $18,400 per annum.

Of course, different regions have seen housing conditions track at different speeds.

The largest annual increase in housing values within a capital city over the past twenty five years has been in Melbourne where values have increased at the annual rate of 8.1% per annum.

Over the past twenty five years Melbourne house values have moved through seven periods where annual capital gains exceeded 10% per annum.

More recently, the Melbourne housing market has been in a mild downturn, highlighting that property values don’t always rise, but over a long term the cyclical nature of housing markets will typically provide a wealth boost.

Conversely, the lowest long term capital gains have been in Adelaide and Brisbane, where house values have risen at the annual rate of 5.9%.

The diversity in growth rates over a long period of time highlights the cyclical nature of the housing market, with dwelling values rising at different speeds from region to region and period to period.

For example, despite Brisbane recording one of the lowest rates of annual capital gains, the period between 2001 and 2004 saw Brisbane house values rising at more than 10% per annum; the lower rate of long term growth is largely attributable to softer conditions since 2010.

The average mortgage size has grown roughly at the same rate as housing values

With dwelling values moving higher, the average loan size has also shown a substantial increase.

In 1993 the average owner occupier loan size nationally was $81,500 and the figure has since risen to $388,100; an increase of 376%.

Twenty five years ago, borrowers in the ACT were holding the largest loans, averaging almost $97,000, however in today’s market the largest average loan sizes can be found in New South Wales ($445,500) and Victoria ($400,200).

Mortgage rates have reduced significantly since 1993.

Twenty five years ago mortgage rates were moving lower from their record highs.

Variable mortgage rates peaked at 17.0% in March of 1990 and by first quarter of 1993 they had reduced to 10.0%.

Today, the standard variable mortgage rate sits at 5.2%, the lowest rate since the 1960’s.

Mortgage serviceability rates have improved thanks to historically low interest rates, however affordability challenges remain.

The proportion of annual household income required to service a mortgage (based on a 20% deposit, a 25 year principal and interest mortgage and the average discounted variable mortgage rate) is currently tracking at approximately 36% compared with a recent peak of 51% of annual household income being dedicated to servicing a mortgage in June of 2008.

Although CoreLogic serviceability measures don’t extend back twenty five years, sixteen years ago, serviceability measures were lower despite mortgage rates being approximately 130 basis points higher.

With dwelling values rising most substantially in Sydney and Melbourne over the past two growth cycles, households are dedicating a larger portion of their annual incomes to servicing their mortgage repayments.

Households in Sydney are generally dedicating the largest proportion of their annual incomes to service a mortgage (49.3%) with Melbourne close behind at 42.6%.

Affordability is still a significant issue

The dwelling price to income ratio rose to new record highs in 2017 due to housing prices rising at a faster pace than household incomes.

This worsening trend in affordability was largely driven by the largest capital cities, Sydney and Melbourne, where housing values have shown the most significant increase.

Sydney’s dwelling price to income ratio is now tracking at 9.3, which means the typical Sydney dwelling now costs 9.3 times more than the median annual household income.

Affordability pressures are likely to be most pronounced across those segments of the market who have tighter budgetary constraints such as first time buyers who haven’t had the benefit of accruing equity in the housing market, and low income households.

Nationally, in order to raise a 20% deposit to buy a dwelling, households would need to dedicate an average of 134.5% of their annual gross income.

The proportion of household income required for a 20% deposit is substantially higher in those markets where value growth has been strongest over the past five years.

In Sydney, households would need to dedicate an average of 185.1% of their annual household income to raise a 20% deposit, while in Melbourne the figure is slightly lower at 159.7%.

Based on these numbers, households will generally require several years to raise a 20% deposit.

Anecdotally, more first time buyers are seeking assistance from benefactors such as their parents or siblings in order to enter the housing market with as large a deposit as possible.

First homebuyers make up a smaller component of housing demand

As dwelling values have shifted higher and affordability has become more challenging, first home buyers have found it harder to participate in the market.

Twenty five years ago, first time buyers accounted for approximately 22% of all owner occupier housing finance commitments.

While that proportion remained reasonably consistent until the year 2000, first home buyer participation in the market has generally been in decline since that time.

The exception has been periods of first home buyer stimulus, where grants and stamp duty concessions have been generous, first time buyer numbers have surged.

The current statistics indicate that first home buyers represent 17.4% of all owner occupier housing finance commitments, rising from a recent low point of 12.9% in late 2015.

Recent stamp duty concessions in New South Wales and Victoria have been a key driver of the rebound in first home buyer participation, while every state and territory has some form of incentive available for first home buyers, typically with greater incentives available for those building or purchasing a new property or those purchasing outside of the capital city.

Investors have become a larger component to housing demand

Investment trends have generally moved in the opposite direction of first home buyers, with investors becoming a larger component of housing demand over the past twenty five years.

In 1993, housing finance commitments for investment purposes accounted for only 20% of the market.

Fast forward to 2015, and investors as a proportion of housing finance reached an historic high, comprising 55% of the value of all new housing finance commitments.

Since that time there have been regulatory changes imposed by the prudential regulator, APRA, which has slowed investor participation in the market.

The latest data to March 2018 shows investors still comprise 42.8% of mortgage demand, more than double the proportion from twenty five years ago.

Urban density has increased as our population grows

The growth in property values over the past twenty five years has happened against a backdrop of ongoing densification across the capital cities, with higher density housing stock rising in prominence due to changes in town planning policies, changing consumer preferences and affordability factors.

Twenty five years ago, only 22.7% of all dwelling sales nationally were for units.

In today’s market units comprise 29.6% of all sales and in some cities where the densification trend has been more pronounced, higher density dwellings account for more than 40% of all sales.

Another example of the densifying urban landscape over the past twenty five years has been the reduction in vacant land block sizes.

In 1993 the average block size based on vacant lands sales nationally was 816sqm.

Developers have progressively reduced the typical block size over time to reach 541sqm in 2015 before land areas started edging higher to the current average size of 610sqm.

Across the capital cities, block sizes are generally smaller than the national average due to the scarcity of land and zoning regulations which allow for higher densities.

Adelaide and Perth show the smallest lot sizes, averaging approximately 379sqm and 375sqm respectively.

It’s still hard to imagine what property values in our future cities will look like.

If home values increase at the same annual rate as they have over the past twenty five years we will see a median dwelling value nationally of $2.9 million by the year 2043.

While that value looks astronomically high in today’s money, if the historic averages play out over the next twenty five years, Sydney values would be breaking the $6.3 million mark and Melbourne would be over $5.8 million.

One thing that is certain is that housing markets will continue to move through their cycles, with periods of growth, decline and steady values conditions.

History has shown that over time these cycles tend to smooth out the year to year volatility in growth rates.

A good example of this is the Melbourne housing market, which has shown the highest long term rate of capital gain, however house values in this city have been through five separate periods where values were declining on an annual basis over the past twenty five years.

Cities will continue to densify as the population grows and urban planning strategies seek to maximize the use of strategically located land and transport corridors, which means more Australians are likely to be living in higher density housing.

Innovative housing design is likely to increase in importance, with small living areas becoming more acceptable thanks to smarter design principles and better use of space.

With technology progressing at a rapid pace, there are likely to be more households taking advantage of flexible working arrangements where they can work remotely with rapid and reliable internet speeds, affordable telecommunications and less requirement to commute into a centrally located place of work.

This may see some housing demand deflected to the markets outside of the capital city boundaries where housing tends to be more affordable.

Additionally, with the eventual advent of driverless cars and rapid transit systems, commuting times from areas that were once considered to be outside of a comfortable travel range may become more popular with home-owners, thereby reducing demand to live close to the major working centres of the city.

There are likely to be a plethora of other evolutions in the housing market and housing demand that remain beyond the imagination.

It was less than ten years ago that the first iPhone was released and roughly twenty five years ago dial-up internet was only just becoming popular.

The likelihood is that advances in technology will continue to accelerate, promoting innovation in how we live and work.

Only time will tell, but the next twenty five years will certainly be an interesting ride.

But what we can be sure of is that the best investment locations will be in close proximity (say 10 – 20 km) to our 3 big east coast capital cities as the more affluent new generation of home buyers push up the values of well located properties, while the less affluent will be pushed further and further out from the main centres.