With the sky-rocketing price of homes these days, you may be wondering how property value is calculated.
Unfortunately, there’s no simple math calculation that you can punch into your calculator and find out. There’s a lot of factors and market research behind a home's valuation.
However, if you’re thinking “location, location, location”, you’re on the right path! When determining a properties value, the following are taken into consideration:
Location, as expected, is the number one factor in determining a property's value.
The location will be valued with regards to the property within the country, province, city, neighbourhood, and right down to the exact street it sits on. It factors in views, the surrounding area, proximity to amenities, schools, parks, beaches, and more.
For example, BC has some of the highest-priced homes in the county, as does the Greater Victoria area. However, a home in Oak Bay, which is a highly desired area in the Capital will have a much higher value than a similar property in Port Renfew, which is also near the ocean but quite far from the city and all amenities.
As you know, Victoria and the majority of Vancouver Island are experiencing a red-hot real estate market right now and have been for some time.
Interest rates are low, buyers are in extremely high-demand, and our inventory is experiencing record lows. All these combined drives the price of homes up as buyers are willing to pay more simply to get into the market.
AGE & CONDITION
The age and condition of your property will have a great impact on the value.
An older home in need of substantial repairs will be valued at much less than one in immaculate condition. That said, the condition of your home may have a greater effect on the value than the age…depending on the location.
For example, a character home in a great location may have a much higher value than a new-build in a less desirable location.
A new roof, landscaped yard, and upgraded HVAC will all have an effect on the value of your property.
Keep in mind, when making improvements to your property, that potential buyers want a home that is move-in ready and suits their needs, not your preferences. For example, a third bathroom or extra closet space may be much more desirable to the masses than a huge ensuite that takes up a substantial amount of space.
When determining the value of your home, it’s always best to utilize the expertise of a professional who is familiar with the current market in your area.