A property valuation is a professional assessment of a property’s market value, prepared by a licensed valuer. In Australia, registered valuers are certified by the Australian Property Institute (API) and are bound by professional standards.
When investors need a valuation:
Before purchasing. Lenders commission independent valuations as part of the loan assessment process to confirm the purchase price reflects market value. If the valuation comes in below the purchase price, the lender will only fund a percentage of the lower valuation amount.
For equity release. When accessing equity from an existing property, the lender orders a valuation to determine the current market value, which determines how much usable equity is available.
For insurance purposes. Building replacement cost valuations (not to be confused with market valuations) determine appropriate levels of building insurance.
Before selling. Investors often obtain an independent valuation before listing a property for sale to establish an informed price expectation and assess whether the timing is right.
For SMSF compliance. SMSFs are required to value assets at market value in their annual financial statements. Property held in an SMSF must be independently valued at least every three years.
Types of valuations:
Full valuation. A physical inspection by a registered valuer, providing a detailed written report. Most reliable but takes 3–7 business days.
Kerbside valuation. An assessment from external inspection only, without internal inspection.
Desktop valuation (AVM). An automated estimate based on comparable sales data. Used by some lenders for low-risk transactions. Less reliable for unusual or high-value properties.
