Positive property attributes that deserve a value-weighting

We assess properties every day, including rigorous comparable sales analysis. Many properties we spot have a standard array of attributes that are easy to compare to others’, however sometimes we spot a property that has a really special offering.

Assigning a value-weighting can be challenging, but in cases like these, they deserve a weighting.

The first is the obvious one. A superb vista that either cannot be built out, or is highly unlikely of ever being built out. Whether it be coastal, lake-edge, parkland or mountain views, attributes such as these are very special, and we endeavour to identify other recent sales that share this particular offering. While the saying “you can’t own a view” is true, a room with a view always carries a higher price tag.

Take these two recent sales in Anglesea as an example. Both on similar sized parcels of land, (403sqm and 460sqm respectively), both a very similar era of house and each boasting the same number of bedrooms and bathrooms. The smaller land house with the water view sold for $1.22M and the other sold for $975K.

The second relates to the invisible updates to the property that equate to future savings or limited maintenance required. Older houses with electricals completely rewired, upgraded plumbing, new roofing or full reblocking/restumping are just some of the examples of this type of positive attribute. They are often hard to see and many buyers overlook them, but factoring in the cost benefit is important, particularly in an older dwelling.

When it comes to units and townhouses, land on leasehold is important to note. For example, a villa unit offering a fenced area of land that is not on title, but does hold a 99 year lease for exclusive use by the inhabitant. While technically the land doesn’t belong to the unit owner, it represents more value than a fenced yard without a license agreement in place.

Property without a land tax obligation impacting the buyer is a feature that is lost on many buyers. Despite the fact that land tax is exempt for owner occupiers, it may come as a surprise that the land tax obligation of the vendor’s (for the balance of the calendar year) is passed on to the buyer, regardless of whether they are exempt themselves or not. For example, a first home buyer could face a land tax bill in the year that they settle their purchase if an obligation was passed to them based on the vendor’s circumstances.

While many land tax adjustments are in the low hundreds (of dollars), some can be well into the thousands.

Land tax must be understood and identified if it impacts a purchase.

Hint: Buyers can take steps to minimise it if it applies, for example; settling as late in the calendar year as possible.

A property with imminent rezoning or postcode updating can often deliver a happy surprise for an owner. And likewise, a property offering enhanced opportunity to subdivide or develop into the future will likely reflect this offering in the sale price, (or value). Land without encumbrances, (ie. easements, covenants, or memorials) will reflect a higher value than a land with an encumbrance.

And one of my favourite positive attributes is a north-facing orientation. I am often asked, “How important is orientation?“, and the reality is that many buyers crave an abundance of natural light. Sometimes this feature is hard for buyers to articulate if they are relying on the ‘vibe’ to instil their interest in a property, but in many situations we have seen a price differential, (between north-facing and south-facing equivalents) of anything from 10-25% in value.

There are many positive property attributes that can’t be overlooked when it comes to appraising a property or determining its desirability.

Reference: light bulb sketch – Robert Krulwich/NPR

Credit: Residential Settlements, Natural light photo: Clay Banks, Electrician photo: James Kovin