Ask five people what a house is worth and you will get five answers. A valuation settles that with evidence. When a registered valuer signs a report, they are certifying an assessment of market value: the price a property should bring between a willing buyer and a willing seller, both acting knowledgeably and without pressure, after proper marketing. Everything in the report has to support that one figure. Here is how the figure is built.

The comparable sales method

For residential property in Queensland, the primary approach is direct comparison. The best evidence of what your property would sell for today is the settled, verified sale prices of similar properties nearby, which rules out listing prices, agent appraisals and website estimates.

The valuer assembles a body of sales evidence and reasons from it to a concluded value. The arithmetic is the simple part, and most of the effort goes into the reasoning. Two competent valuers working from the same evidence should land close together, because the method disciplines the judgement at every step.

How comparables are selected

Not every nearby sale is a comparable. Selecting sales for a residential valuation, a valuer weighs:

  • Recency. The closer the sale to the valuation date, the better. In a moving market, a nine month old sale can already be out of date.
  • Location. Same suburb where possible, and ideally the same pocket of it. In Brisbane, value shifts street by street. A flood-free street and a flood-affected one in the same suburb are different markets.
  • Land. Similar site area, frontage, topography and zoning. A steep 405 square metre lot is not a match for a flat 810 square metre one.
  • Improvements. Similar dwelling size, construction, age and accommodation. A fully renovated post-war home and an original one sit far apart, whatever the floor plans say.
  • Sale conditions. Arm’s length, properly marketed transactions only. A transfer between family members, or a sale under duress, is not market evidence.

Three to six closely comparable sales, properly analysed, carry more weight than twenty loose ones. A real part of the job is culling the sales that do not hold up under closer analysis.

Adjusting the evidence

No two properties are identical, so no sale is used raw. Each comparable is analysed for the ways it differs from the subject property, and its price is adjusted accordingly. If the comparable has a second bathroom and the subject does not, that sale supports a lower figure than its headline price suggests. If the subject has the superior attribute, a better outlook, a pool, dual street access, the adjustment runs the other way.

Adjustments also cover time. If the market has moved since a comparable sold, its price is brought forward to the valuation date. Where the evidence allows, that movement is measured from resales and paired sales. The report should show this reasoning, because the valuer may have to defend those adjustments if the figure is ever challenged.

Land and improvements

Alongside the direct comparison, the valuer also considers what the land is worth on its own and what the improvements add. Land is the durable component. Its value turns on position, size, shape, zoning and constraints, and in Brisbane the constraints matter: flood mapping, character housing controls, easements, overlays. Improvements, meaning the dwelling and everything else built on the site, add value, but rarely what they cost. A house contributes whatever the current market says it is worth, and that worth declines with age and dated presentation. This is why an expensive renovation does not automatically lift value by the amount spent.

The split matters. Insurance, some tax questions and development feasibility turn on the improvements. Land value questions stand on their own. A signed valuation can set the allocation out explicitly, while an estimate only gives you one combined number.

Condition, and why the inspection matters

Condition is assessed on site. The inspection covers the structure and roofline, evidence of movement or moisture, the age and standard of wet areas, the quality of finishes, and how the floor plan works. It also covers the things no dataset records: the retaining wall at the rear, the neighbour’s shed on the boundary, the traffic noise at school pickup, the difference between the high side and the low side of the street. Two houses that look identical in a listing can sit a long way apart once you have walked through both.

A certified valuation versus an algorithm

Automated valuation models, the estimates on property websites and the desktop tools some lenders use, work by statistical modelling across large volumes of sales data. They are fast and cheap, and on a standard house in a uniform suburb they can land in the right range. But no algorithm has inspected the property, so it cannot see condition, the quality of a renovation, an easement, a flooding history the data misses, or a main road out the front. It treats the recorded attributes as the property, and where those records are wrong or thin, the estimate follows them. The models publish wide confidence ranges for exactly this reason.

A certified valuation is a different kind of document. It rests on a physical inspection, sales selected and adjusted by a valuer who knows the local market, reasoning that is set out in writing, and a registered valuer’s signature standing behind the figure. That is why courts, the ATO, revenue offices and SMSF auditors generally require a valuation from a qualified, independent valuer and will not accept an online estimate. In family law matters, the standard practice is a single expert valuer appointed for both parties, and that expert’s report must withstand cross-examination. An algorithm cannot be cross-examined.

If the figure matters for a settlement, a tax event, your fund’s annual reporting or simply a decision you want to get right, call the practice on 07 5550 4055 and talk through what your situation needs.