What makes real estate so valuable - 2

We live in a country with vast expanses of space, yet we cling to the major coastal cities for dear life and treat the inner-ring suburbs of Sydney, Melbourne and Brisbane like hallowed turf that we can only hope to be worthy of residing on.

Property taps into some of our strongest needs and desires – security, safety, prestige, status, a sense of success, something to leave behind for our children.

We all need somewhere to live, or somewhere to operate a business, and as with any asset, when demand outstrips supply, prices go up – as we’ve clearly seen over the past few months.

Having said this, there are a number of key factors that will always play a part in the value of a property, in the most buoyant or subdued of markets.

So let’s take a look at why some properties are more valuable than others…

It turns out size does matter, after all

The value of a property is driven primarily by the worth of the land it’s situated on, meaning in any given location larger blocks will be worth more than smaller plots.

But that’s not the whole story – it really matters where the land is located because not all land is created equal.

In general, land closer to the CBD or the water, or locations within short walking distance of public transport or train stations is more sought after and therefore more valuable.

Just look at your own neighborhood – not all spots are considered equal, are they?

Some locations will be sought after, some streets will be more attractive and even one end of a street can be more desirable and therefore valuable than the other.

The bottom line:

Like most things in life – supply and demand for a property determine its value.

And in the future, Australia’s population growth, our increasing wealth as a nation, and our desire to live in a select number of locations in our big capital cities will underpin the future value of well-located properties.

RealRenta has all the tools that a property manager has, but at over ¼ the cost of a property manager.

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Jason Gwerder
Friday, 14 May 2021

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