Sometimes this difference is due to emotional connections they have to their homes while, other times, it is a misunderstanding as to what factors influence a property’s value.
Property trends and "fashions" also have a strong impact on what makes one property more valuable than another, so value – and selling prices, can be dependent on the times. Therefore, supply-and-demand is possibly the most accurate gauge to determine a property’s worth, although property professionals note that not even this is 100% reliable as buyers themselves will place different values on different property elements.
A property’s location and features have a “big influence” on its value, says Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa, explaining that the main principal that contributes to growth in property prices is, like all fields of trade, demand and supply.
“The higher the demand, the more the seller can charge. When a country’s economy has hit a dip, this will have a knock-on effect on consumer’s buying power, which means that the demand for property will drop and sellers will have to drop their prices in order to sell to a market with a pinched pocket.”
Each suburb, however, has its own target market and price range, and this dictates the upper and lower limits of property values in the area, says Tony Clarke, managing director of the Rawson Property Group. But even within this price band, there are often certain roads or blocks that achieve higher-than-average prices.
“Typically, these pockets of more expensive properties will be positioned in the most convenient, picturesque, or sought after parts of the neighbourhood. They may have better views, better orientation, or better security than those around them, and because they attract a more affluent buyer, they are often more modern and well-maintained.”
When determining value, Craig Mott, a regional sales manager for the Rawson Property Group says a professional property evaluator will look both at the features a home has as well as the condition of the home.
They will also compare the property to others in the area, and what they sold for, before coming to a decision. Furthermore, there are definitely, ‘flavours of the month’ for what is considered valuable in a property or not, says Charles Haigh, broker/owner of Re/Max Elite.
Echoing this, Rode and Associates’ Erwin Rode says: “Fashions come and go, and this also apply to the layout and finishes of a property…Houses age like everything in the universe and, for this reason, a valuer cannot compare the price achieved by a 20-year old house with a five-year old without making an adjustment.”
As a matter of interest, he says style does not appear to add or subtract from value. “The explanation is that what is horrid to one potential buyer is acceptable or even pleasing to another.” Cell phone masts detract from nearby properties’ values and aesthetics, says Haigh.
“They try to ‘dress it up’ as a fir tree or with camouflage but it’s easily spotted. Many buyers are not happy as they believe that it emits some kind of energy that will affect their health.”
Although Erwin Rode from Rode and Associates says there is no scientific evidence that close proximity to a cell-phone mast or high-voltage power line affects health, he admits that, in the market, “it is the perception that counts”.
Location also plays a role in the value of a property and so, being close to an informal settlement, for example, detracts from a property’s value, he says.
“However, when buying an existing home, this negative should be priced in already.” Crime and poor maintenance can also have an impact on prices because it will affect the demand for property in that area, says Seeff Property Group Samuel Seeff.
Sea views, a waterfront location, close proximity to schools and amenities and ease of access for work and business are positive location aspects add to a property’s value.
Increasingly, people want to live closer to work and want to enjoy lifestyle benefits during their free time, says Seeff, adding that some suburbs also have the ‘X-factor’ and better reputation, so attract higher prices.
Other contributors to a property’s value is accessibility to major freeways, being in areas where the rush hour peak commutes can be avoided, as well as being near to good schools, says Haigh.
When it comes to security, the more bells and whistles and cameras, the better, he adds.