What makes one property superior to another?

This guide will dive into factors that affect a home's price, particularly why one home may be superior or inferior to one right next door.
Erin Howell
Written by
Erin Howell
Ava Crawford
Reviewed by
Ava Crawford
Last updated
March 10, 2023
0 minute read
Table of contents
Living room with wicker chairs

When you are looking at buying a home, it is very obvious that no two properties are exactly the same. Houses on the same street can have significant differences in value and sometimes it is hard to understand why!

This guide will dive into some of the factors that can affect the value of a property, particularly looking at why one home may be completely superior or inferior to one right next door.

This step-by-step guide will show you how you can decipher listing prices as a first-home buyer and help you land on a smart purchase price offer for your dream home.

Valuing a property: What to look for?

Every home is unique, it is important to understand what makes your home stand out or what it doesn’t have in comparison to others on the market. Each property will have features that  impact the value of the property. If a property has amazing upgrades or new renovations, professional valuers, as well as the market at large, will price it as superior to a home that is more run down.

These things can be subjective, so whether you are getting into real estate investing or looking for your first home loan, it is important to know what to look for.

Features that typically drive up a home price
  • Brand new renovations
  • Additional bedrooms, bathrooms
  • Approval for extensions
  • Close to great transport networks
  • Within school catchment areas
  • Land size - square footage increases the value
  • Internal floor space
  • Location
  • Car spaces
  • Location to amenities
  • Ability to add value
Features that typically drive down a home price
  • On or near a noisy road
  • Outside of school catchment areas
  • Renovations required
  • Significant building defects or pest-related issues
Factors that can impact the decline or increase in price
  • Current Market conditions
  • Interest rates

If your desired home has many value-driving features, it is likely to be more expensive than an identical home that sits on a noisy street.

It is important to look at comparative sales and the data to understand if the property you are looking at is superior or inferior to a recent comparable sale.

When a bank values a property, they look at similar features to assess value, including
  • Whether a property is comparatively inferior, superior or similar to others in the area
  • The state of the local market
  • Previous area growth and future potential
  • The risk involved with the house and their likelihood to recoup their money if something goes wrong

Understanding the value-driving factors is important to know if your desktop valuation is fair, competitive or overdone.

The important step in negotiating for a home is to define the top limit you’d be prepared to happily pay for the home. Don’t go above this.

What can you look for to inform these data points?

Looking at similar properties/market depth

Deep dive into some of these factors:

What else is for sale in the area? How many homes are in surrounding areas with similar characteristics? What price are they listed for? Are they superior, similar or inferior to the home you are looking at? When looking at a property online look out for: ‘renovators delight’ and ‘brimming with opportunity,’ these are usually signs that a home needs work!

Comparable sales

Look at 3-5 comparable recent home sales. Understand what properties sold recently and how much they sold for. How long was each property on the market for? Who sold it? This will help provide timely context to form facts about the home’s market value.


Whether it is your first time or your second or third property investment when you are entering the housing market, it is crucial to understand the fundamentals of what gives a home value. This allows you to negotiate effectively with real estate agents to get the best sale price.  

Once you have purchased your home, your lender or mortgage broker also runs a valuation, to ensure it meets your lender’s risk requirements.

Valuations are also important at the homeowner stage if you are looking to refinance. By adding value-driving features to the home, you are increasing the property value and therefore the equity available in your home. This is why we encourage our customers at OwnHome to look at how they can add value to their home to increase the value of their homes.

Check out our guide to negotiating when buying a home for tips on the Australian housing market,  market analysis, finding comparable properties and deep diving into your local property market to ensure you are securing the best house prices.


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This article is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation, or needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS), or other offer documents before making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold).
Prepared by OwnHome Services Pty Ltd ACN 664 492 059. This information does not take your personal objectives, circumstances or needs into account. Always read the disclosure documents for products and services before deciding on a product or service, and consider seeking independent legal, financial, taxation or other advice for your unique circumstances.

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