Property Value: these are the key factors
When selling your home, it is important to know its value. This also applies if you are planning to buy a house. Furthermore, given the price developments in the housing market, it is naturally interesting to know the property value. So, there are various reasons to determine the property value.
There are also various methods to calculate the property value, or at least obtain an indication, such as requesting the WOZ (Property Valuation Act) property value for a house or discovering the value of your own home through a free valuation report. Of course, there are multiple factors that ultimately determine a property's value. These are extensively covered here, along with the option to request the property value of your home online for free.
Intrinsic Value and Market Value
Firstly, when it comes to property value, a distinction can be made between intrinsic value and market value. Intrinsic value pertains to the amount a property is actually worth, assessed based on objective criteria. Market value, on the other hand, relates to the selling price of the house, specifically, the amount a buyer is willing to pay to purchase the property.
Difference Between WOZ Value and Market Property Value
The WOZ value provides an indication of what a house is worth but is not entirely reliable for determining the exact property value. The municipality determines the WOZ value, taking factors such as surface area and location into account. However, the WOZ value does not indicate the property's market value. In fact, there is often a significant difference between these two values. The value assigned by the municipality typically lags behind by about a year, and it does not consider recent additions like a new kitchen, an extension, or a new bathroom, all of which can significantly influence the property's value in the market.
Factors Determining Property Value
One of the significant factors influencing property value is its location. A house in a major city like Amsterdam is worth more than the same house in a village in Friesland. The location itself also plays a role, such as whether it is situated in a quiet neighborhood, near a highway, in a central location, or in a newly developed neighborhood on the outskirts of a city.
The type of house and the condition of the property are also important factors that influence property value. The surface area in square meters, as well as the presence of a garden or balcony, also play a role. The number of bedrooms is another factor, and the sustainability factor also contributes to property value. This includes features like solar panels, a heat pump, and energy-efficient insulation and windows. All of these factors combined determine the value of properties.
- Location: village, city, downtown, suburb
- House Type: apartment, single-family home, detached house, bungalow, or penthouse
- Surface Area: number of square meters for the property and plot
- Outdoor Space: garden, balcony, and rooftop terrace
- Bedrooms: more bedrooms increase the property's value
- Sustainability Factor: solar panels, heat pump, and insulated windows
- Property Value of Comparable Homes
An interesting aspect of calculating a property's value is considering the property value of comparable homes. This involves homes of the same type located in the vicinity. The value of comparable homes serves as an additional measure to calculate the value of your own home, for example.
Free Property Valuation Report
We offer you the opportunity to request a free valuation report, allowing you to quickly discover the estimated value of your property. In the steps to create a free property valuation report, we also make use of the property value of comparable homes. You start by entering the postal code and selecting a reason for requesting the valuation, such as purchasing a home in Amsterdam. Next, you indicate when you plan to move and provide the property's square meters. Then, you select the type of property, after which the tool searches for comparable homes. This increases the reliability of the property value estimate. You'll see a photo of a property and indicate whether it's a comparable home or not. Finally, you enter your name, email address, and phone number, and you will receive a free valuation report from us.
Property Value and Asking Price
There is another interesting aspect that affects the actual property value, namely, the asking price of the house. It is entirely possible for the asking price to differ from the property's value. The asking price can be lower or higher than the property's value. Personal factors also come into play for potential homebuyers. While there are objective criteria for determining the property's value, personal factors are also involved. If someone sees your property as their dream home, they may be willing to pay more than the property is objectively worth. Economic conditions also play a significant role.
Economic Conditions and Property Value
The economic situation is also important when it comes to property value. History shows that asking prices tend to drop during an economic crisis. An economic recession leads to reduced demand for homes due to uncertainty about financial stability. When property prices reach their lowest point, the path to economic recovery typically begins, leading to an increase in property prices. In addition to economic conditions, the overall supply in the housing market also plays a role. There is a housing problem in the Netherlands, characterized by a scarcity of homes. In Amsterdam and the rest of the Randstad region, this problem is even more significant than in, for example, the northern part of the country. The scarcity of homes causes house prices to rise. The supply is relatively limited compared to the demand.
You can see that there are different forms of property value, and various circumstances determine the price. Ultimately, for you as a buyer or seller, the purchase or sale price is the most important. We, as Amstelland Makelaars, are happy to play a role in that.