Key takeaways:
Property appraisals and valuations serve different purposes. Appraisals estimate market value, while valuations provide a formal assessment by a qualified valuer.
Lenders may require their own valuation. This could involve an automated, desktop or physical assessment.
Property valuation costs vary. A standard residential valuation may cost around $300 to $600, depending on the property and assessment.
Neither figure guarantees the sale price. Market conditions, buyer demand and competition can affect the final result.
Renovations don't necessarily add value dollar for dollar. Consider local demand, comparable properties and the risk of overcapitalising.
If you want to know what your property could be worth, you may come across an appraisal, formal valuation or online property estimate.
While each can indicate a property's value, they work differently and suit different purposes.
An appraisal or online estimate can be a useful starting point when researching your property or considering selling. For lending purposes, however, a lender may require its own property valuation.
This guide covers how appraisals and valuations work, when you might need one, lender valuation methods, costs and what can affect the final figure.
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At a glance: What's the difference between a property appraisal and a valuation?
The main difference is how the property value is assessed and what the figure can be used for. An online estimate provides an initial indication, an appraisal reflects a real estate agent’s view of market value, and a valuation is a formal assessment by a qualified valuer.
| Property appraisal | Property valuation | Online property estimate |
|---|---|---|---|
What is it? | An estimate of a property’s likely market value. | A formal assessment of a property’s value at a particular point in time. | An indicative estimate based on available property and market data. |
Who provides it? | Usually a real estate agent. | An appropriately qualified property valuer. | An online property tool using available data and automated modelling. |
What is it used for? | Selling or researching your property’s position in the local market. | Home lending, refinancing, equity assessments, property settlements, deceased estates and dispute resolution. | Initial research when selling, buying, refinancing or reviewing equity. |
Typical cost | Commonly offered at no cost by real estate agents. | A standard residential valuation may cost around $440–$880, depending on the property, location and assessment required. A lender may arrange or cover the cost. | Often available at no cost, including Aussie’s property report tool. |
Does it determine the sale price? | No, the eventual sale price may be higher or lower. | No, the valuation may differ from the eventual sale price. | No, the eventual sale price may differ. |
Is it a formal assessment? | No, it is used as a market guide. | Yes, it may be used for lending, legal or other specified purposes. | No, it provides an indicative estimate. |
How does a property appraisal work?
A real estate agent may estimate your property's market value by looking at recent comparable sales, its features and condition, and current local market conditions.
An agent familiar with your area may also have first-hand knowledge of recent sales, competing properties and what local buyers are currently paying.
This can make an appraisal useful if you're considering selling or want to understand where your property sits in the local market. Agents often offer appraisals at no cost, though estimates can vary by agent.
How does a property valuation work?
A qualified property valuer assesses the property alongside relevant property and market information to determine its value at a particular point in time.
The Australian Property Institute (API) recognises several property valuer certifications, including Certified Practising Valuer (CPV), Certified Practising Valuer (Residential) and Residential Property Valuer (RPV). A valuer's work depends on their certification and professional requirements.
What does a property valuer consider?
For a residential property, a valuer may consider:
Location and local market conditions
Land and dwelling size
Property layout, aspect and topography
Features such as bedrooms, a pool or updated kitchen
Building condition and structure
Council zoning and planning restrictions
Heritage status
Damage or faults
Relevant title information, caveats or encumbrances
Property access
Improvements can increase a property's value, but renovation costs don't necessarily translate dollar-for-dollar into a higher valuation.
For example, spending $20,000 on a bathroom renovation does not mean the property's value will increase by $20,000. Its contribution will depend on the property, the improvement and the local market.
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When might you need a property valuation?
A formal valuation may be used for:
Applying for or refinancing a home loan
Assessing property equity
Property settlements
Deceased estates
Dispute resolution
The type of valuation required depends on its purpose. For home lending, the lender determines what property assessment it requires and may arrange the valuation as part of your application.
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What types of property valuations do lenders use?
A lender may not need a valuer to inspect the property physically. Depending on the lender, property and application, it may use an automated assessment, remote valuation or physical inspection.
Valuation type | How it works | When it may be used |
|---|---|---|
Full valuation | A qualified valuer inspects the property, generally assessing the interior and exterior alongside relevant property and market information. | When the lender requires a more detailed assessment. |
Kerbside or drive-by valuation | A valuer assesses the property externally and considers available property and market information, without an internal inspection. | When the lender’s policy allows an external assessment. |
Desktop valuation | A valuer assesses the property remotely using available data, such as property records and comparable sales. | When sufficient information is available and the lender allows a remote assessment. |
Automated valuation model (AVM) | A technology-based model uses available property and market data to generate an estimated value. | When the property and application meet the lender’s requirements for an automated assessment. |
Desktop valuations and AVMs both may not require a physical inspection, but they work differently.
A desktop valuation involves a valuer assessing available information, while an AVM uses an automated model to estimate value.
The lender determines which method it will accept based on factors such as its lending policy, the property, available information and the application. Valuation requirements can therefore vary between lenders.
Note: Valuation methods, terminology and requirements vary between lenders. An Aussie Broker can help you understand the valuation process that may apply to your home loan or refinance.
What if the lender’s valuation is lower than the purchase price?
Sometimes, a lender’s valuation can come in below the price you’ve agreed to pay. If that happens, the lender may assess the loan against the lower value. You may need to contribute more funds, review your loan structure or speak with the seller about the price.
If you’ve signed an unconditional contract, seek legal advice as soon as possible.
How much does a property valuation cost?
The cost of a property valuation depends on factors such as the valuation type, property and location. As a general guide, a standard residential valuation may cost around $300 to $600, while more detailed or complex assessments can cost more.
The Australian Property Institute's (API) 2026 indicative fee ranges, including GST, are:
Desktop valuation | Kerbside valuation | Full residential valuation |
|---|---|---|
$220 to $385 | $330 to $495 | $440 to $880 |
Costs can also vary based on the property's size and characteristics, the complexity of the assessment and travel requirements, particularly for some regional or remote properties.
For a home loan or refinance, the lender may arrange the valuation and may cover, waive or rebate the fee, depending on its policy, the loan and the property.
How accurate are property appraisals and valuations?
Neither an appraisal nor a valuation guarantees what a property will eventually sell for. Both rely on property and market information available at the time of the assessment.
Comparable sales can help inform the figure, but they reflect past transactions. In a rapidly changing market, a valuation based on recent comparable sales may not fully reflect the latest shifts in buyer demand or prices by the time your property is sold.
The final sale price can also be affected by:
Buyer demand: The number of interested buyers and the offers they make.
Competition: Multiple buyers competing for a property can affect the price achieved.
Market conditions: Local prices and demand can change between the assessment and sale.
Buyer and seller decisions: The final price depends on what a buyer is prepared to pay, and a seller is prepared to accept.
For this reason, treat the figure as a point-in-time assessment rather than a prediction of the sale price.
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Can I use a property appraisal instead of a valuation for a home loan?
Generally, no. If a lender requires a property valuation, a real estate agent's appraisal generally won't meet that requirement.
The lender determines the type of assessment required based on its lending policy, the property and your application. It may also arrange the valuation rather than asking you to organise one yourself.
If you're buying, refinancing or looking to access equity, an Aussie Broker can explain the lender's valuation requirements and how they may apply to your application.
How to increase your property's value
You can't change factors like location or land size, but targeted improvements can support your property's value or make it more appealing to buyers.
Before renovating, consider what buyers in your local market value and whether the potential benefit justifies the cost. Spending more on renovations does not necessarily increase property value by the same amount. Consider these steps:
Focus on your local market. Before committing to major improvements, look at the features buyers value in comparable properties.
Avoid overcapitalising. Expensive renovations may not add enough value to recover their cost, particularly if they push your property beyond comparable homes in the area.
Consider usable space. An extra bedroom, living area or extension may improve functionality, subject to costs, planning requirements and approvals.
Review the floor plan. Reconfiguring an impractical layout may make better use of existing space without adding an extension.
Improve street appeal. Targeted improvements to the exterior, garden or entrance can improve presentation, although their impact on value will vary.
Consider lower-cost updates. Fresh paint, flooring and other cosmetic improvements may improve presentation without the cost of a major renovation.
Fix faults and damage. Addressing maintenance issues, structural problems or damaged features can prevent known defects from detracting from the property.
If you're considering substantial renovations, understanding your available home equity can help you assess your finance options. Read our guide to home equity to learn how equity works and how you may be able to access it, subject to lender approval and lending criteria.
Choosing the right way to assess your property's value
The right way to assess your property's value depends on what you need the figure for. An online property estimate can provide an initial indication, while an agent appraisal may give you more local market context if you're considering selling. A formal valuation may be required for a home loan, refinance, equity assessment or certain other formal purposes.
If you're refinancing, looking to access your home equity or considering another property, the lender's valuation can affect how it assesses your application and available options. You can also use our mortgage repayments calculator to explore how different loan amounts could affect your repayments.
An Aussie Broker can help you understand different lenders' valuation requirements and how they may apply to your circumstances, subject to lending criteria and approval.