Property Valuation Guide Australia: Types, Costs and What to Expect (2026)

Whether you are buying, selling, refinancing, or settling an estate, property valuations play a central role in Australian real estate transactions. Understanding the different types of valuations, how they work, and what affects the outcome puts you in a much stronger position to make informed decisions. This guide explains everything you need to know about property valuations in Australia.

Types of Property Valuations

Bank (Lender) Valuation

A bank valuation (also called a lender's valuation) is ordered by your lender as part of the mortgage approval process. Its purpose is to confirm that the property provides adequate security for the loan. The lender wants to know that if you default, they can recover the loan amount by selling the property. Bank valuations are conservative by nature — the valuer is assessing risk for the lender, not trying to establish the highest possible price.

Bank valuations are typically paid for by the borrower (either directly or through loan fees), though some lenders absorb the cost as part of their loan package. The cost ranges from $300 to $600 for a standard residential property.

Full (Sworn or Certified) Valuation

A full valuation is a comprehensive, detailed report prepared by a certified practising valuer (CPV). It includes a thorough physical inspection of the property, analysis of comparable sales, assessment of the local market, and consideration of the property's specific features, condition, and any planning or zoning issues. Full valuations are used for:

• Family law property settlements
• Estate and probate matters
• Capital gains tax assessments
• Insurance purposes
• Disputes and litigation
• Pre-purchase or pre-sale pricing decisions

A full valuation typically costs $400 to $800 for a standard residential property, or $800 to $2,000+ for complex, rural, or commercial properties. The report is usually 20 to 40 pages and provides a detailed justification for the assessed value.

Kerbside Valuation

A kerbside (or drive-by) valuation involves the valuer inspecting the property from the street without entering the home. The valuer assesses the exterior condition, location, land size, and neighbourhood, then uses comparable sales data to estimate the value. Kerbside valuations are less accurate than full inspections because the valuer cannot assess the interior condition, renovations, or defects.

Lenders sometimes use kerbside valuations for low-risk refinancing or when the loan-to-value ratio (LVR) is well below 80%. They cost less than full valuations — typically $150 to $300.

Desktop Valuation

A desktop valuation is conducted entirely remotely, without any physical inspection. The valuer relies on comparable sales data, property databases, aerial imagery, and statistical modelling. Desktop valuations are the fastest and cheapest option (often $50 to $150 or included in the loan application fee), but they are also the least accurate.

Lenders use desktop valuations for low-risk scenarios — typically refinancing with a low LVR where the property is in a well-established suburb with plentiful comparable sales data. Desktop valuations are not suitable for unique properties, rural areas, or high-LVR applications.

Automated Valuation Model (AVM)

AVMs are computer-generated estimates based on algorithms that analyse recent sales data, property attributes, and market trends. They are instant and free (or very low cost), making them useful for initial research. However, AVMs cannot account for a property's specific condition, renovations, views, or unique characteristics. They should be treated as indicative estimates, not definitive valuations.

How Bank Valuations Work

Why Bank Valuations Differ from the Purchase Price

It is common for a bank valuation to come in at a different figure to the agreed purchase price. There are several reasons this happens:

• Conservative methodology: Valuers are trained to be conservative. They are assessing risk for the lender, so they tend to err on the side of caution, particularly in volatile or uncertain markets.
• Comparable sales lag: Valuers rely on settled (completed) sales, which may be 2 to 4 months old by the time they appear in records. In a rapidly rising market, recent comparables may not reflect current prices.
• Emotional buying: Buyers sometimes pay above market value due to auction competition, emotional attachment, or urgency. The valuer assesses what the property is worth objectively, not what one particular buyer was willing to pay.
• Unique features: Properties with unusual features (harbour views, heritage character, unique architectural design) can be difficult to value using standard comparable sales. The valuer may not adequately capture the premium these features command.
• Renovations and improvements: Recent renovations may not be fully reflected in comparable sales if similar renovated properties have not sold recently. Not all renovation spending translates dollar-for-dollar into increased value.
• Different valuer, different opinion: Valuation involves professional judgement. Two qualified valuers can legitimately arrive at different values for the same property, particularly when comparable sales are limited.

What to Do If Your Bank Valuation Is Low

A short valuation (where the bank values the property below the purchase price) does not necessarily mean the deal is off. Here are your options:

• Request a copy of the valuation report. Review the comparable sales used and check for factual errors (wrong number of bedrooms, incorrect land size, etc.). Errors do happen and can be corrected.
• Provide additional comparable sales evidence. If you or your buyer's agent are aware of recent comparable sales that the valuer may have missed, provide these to the lender and request a reconsideration.
• Request a second valuation. Some lenders allow a second valuation with a different valuer, particularly if you can demonstrate that the first valuation contains errors or used inappropriate comparables. You may need to pay for the second valuation.
• Try a different lender. Different lenders use different valuation panels, and a different valuer may arrive at a higher figure. Your mortgage broker can advise on which lenders might be more favourable for your property type and location.
• Increase your deposit. If you have additional savings, a larger deposit can offset a lower valuation and bring the LVR back within the lender's requirements.
• Renegotiate the purchase price. If the valuation suggests you are overpaying, consider renegotiating with the vendor. A short valuation gives you legitimate leverage to request a price reduction. Our guide on how to negotiate property price covers techniques for approaching this conversation effectively.
• Walk away. If your contract includes a finance clause and formal approval is not granted because of the low valuation, you may be able to terminate the contract and recover your deposit.

Factors That Affect Property Valuations

Understanding what valuers look at helps you prepare your property and set realistic expectations. The key factors include:

• Location: The most significant factor. Suburb, street, proximity to amenities, schools, public transport, and views all influence value.
• Land size and dimensions: Larger blocks generally command higher values. Regular-shaped blocks are preferred over irregular ones.
• Building size and layout: Total floor area, number of bedrooms and bathrooms, and the functionality of the floor plan.
• Condition and age: Well-maintained properties in good structural condition value higher. Older properties may be discounted for deferred maintenance.
• Renovations and improvements: Quality renovations to kitchens, bathrooms, and living areas add value. DIY or non-compliant work can detract from value.
• Zoning and development potential: Properties with development potential (e.g., land that can be subdivided) may attract a premium.
• Market conditions: The broader property market, interest rates, supply and demand, and recent local sales trends all influence the valuation.
• Title type and encumbrances: Freehold (Torrens) title properties typically value higher than strata title for equivalent properties. Easements, covenants, and caveats can reduce value.
• Environmental risks: Flood, bushfire, and contamination risks can significantly affect valuations.

Capital Improved Value vs Site Value

Understanding the difference between CIV and site value is important because different taxes and charges are based on different value types. Council rates may be based on CIV (in Victoria) or unimproved land value (in NSW). Land tax is universally based on unimproved land value or site value. You can typically find your property's assessed values on your council rates notice or through your state's Valuer-General website.

How to Prepare for a Valuation

Valuation Costs

Valuation costs vary depending on the type of valuation and the property:

• Desktop valuation: $50 to $150 (often included in loan application fees).
• Kerbside valuation: $150 to $300.
• Standard bank valuation (full inspection): $300 to $600.
• Independent full (sworn) valuation: $400 to $800 for standard residential; $800 to $2,000+ for complex, rural, or high-value properties.
• Retrospective valuation: $500 to $1,000+ (required for capital gains tax assessments where a historical value is needed).

For buyers, understanding how much Lenders Mortgage Insurance may cost if a low valuation pushes your LVR above 80% is equally important. Factor valuation risks into your due diligence process.

Related Guides

• First Home Buyer Guide — Complete guide to buying your first home in Australia, including finance and deposit requirements.
• Property Due Diligence Checklist — The complete checklist for investigating a property before purchase.
• What Is Lenders Mortgage Insurance? — How LMI works and when it applies, including its relationship to bank valuations.
• How to Read a Property Contract — Step-by-step guide to understanding finance clauses and other key contract terms.