Michael McNulty
National Director - Residential and Regional Valuation
Property owners, lenders and brokers typically need residential property valuations for loan security, financial reporting, taxation, family law and estate matters, insurance, property litigation, and compulsory acquisition and compensation matters.
Loan security valuations are required for property purchases, refinancing, equity releases and construction projects. The type of valuation needed depends on each lender’s individual policies regarding property values, property risks, credit risks and loan-to-value ratios.
Valuations are also needed for financial reporting purposes on residential property assets, ranging from a single asset through to large portfolios. This includes audit requirements associated with self-managed superannuation funds (SMSFs), government property portfolios, syndicated portfolios and real estate investment trusts (REITs). The Australian Tax Office also requires valuations for CGT, SMSF reporting and depreciation purposes.
In family law matters – including separations, divorces, family share divisions, and deceased estates – independent property valuations are needed to assess the value of assets as a key part of the process, especially when the parties cannot agree on asset values. Opteon’s Certified Practicing Valuers (CPV) act as expert witnesses in these cases and take a professional, independent and evidence-driven approach. We provide similar services to support estate succession planning and the probate process.
We also act as expert witnesses in litigation and dispute resolution matters, providing independent valuation evidence and the reasons for that opinion, including any impacts from specific events, defects, planning changes, acquisitions, easements, or other factors. When we’re appointed as an expert witness, importantly, our duty is to the court or tribunal, not to the party that engaged us. We also assist parties in compulsory acquisition and compensation matters by providing independent valuation and expert witness services.
Insurance replacement cost estimates assist property owners in renewing insurance and ensuring adequate cover. They are also a standard requirement in loan security valuations, as most lenders require evidence of sufficient insurance as a condition of providing finance.
Residential property valuations are governed by a combination of applicable laws, professional standards and client instructions. Valuers must comply with all legislation, regulations and statutory obligations relevant to the valuation assignment, including state or territory valuation requirements, land and property legislation, real property acts, land valuation acts, residential leasing legislation, the Privacy Act 1988, and any applicable requirements or directions issued by APRA, ASIC, the AASB and the ATO.
In addition to legislative requirements, valuers must comply with relevant professional standards and obligations, including the Australian Property Institute (API) Rules of Professional Conduct, the International Valuation Standards (IVS), and any applicable guidance notes, practice standards or standing instructions. For loan security valuations, this may also include lender-specific requirements such as the ABFI Residential Valuation Standing Instructions and PropertyPRO requirements.
The specific rules applicable to a valuation will depend on the intended use of the report. For example, valuations prepared for loan security purposes are subject to different requirements than valuations prepared for taxation, family law, financial reporting, litigation or compensation purposes. Valuers must ensure that the valuation methodology, reporting content and level of due diligence are appropriate for the intended use and are consistent with all applicable legal, regulatory and professional obligations.
Accordingly, when undertaking a residential property valuation, a valuer must ensure compliance with all applicable laws, professional standards, regulatory requirements and client instructions relevant to the assignment, and must exercise professional judgment to deliver a valuation that is suitable for its intended use.
Depending on the type of valuation required, a residential property valuation will typically consider factors including:
highest and best use of the property
location, including neighbourhood and suburb demand, site orientation, access to public transport, shops and amenities, schools, child care, the nature of the road (for example, a main road compared to a quiet side street), and proximity to power lines or train corridors
zoning, planning and restrictions, including bushfire attack level (BAL) ratings and flood overlays, easements and covenants
land size, shape and topography
land improvements, including building structures and their condition, including how the structures have been maintained and whether repairs are needed
number of bedrooms, layout, living spaces, outdoor areas and other property features, for example pools and granny flats
quality of fixtures and fittings
ESG factors, such as solar, batteries and double-glazed windows
vehicle access to the property and car accommodation, including driveways, carports and garages
recent sales of similar properties in the area
market conditions, supply and demand, and market sentiment
lease terms.
A valuer is engaged to assess a 4-bedroom home in Essendon, a suburb of Melbourne, situated on a 650m² allotment with two bathrooms, a double garage, and modern renovations.
The valuer analyses recent comparable sales ranging from $1.69 million to $1.78 million and assesses differences in location, land size, condition, and level of improvement. They also consider zoning, title details, market conditions, buyer demand, and any planning restrictions.
After adjusting the comparable sales to reflect these differences, the valuer concludes a market value of $1.75 million as at the valuation date. This figure represents the price that would likely be achieved between a willing buyer and willing seller in an open and competitive market.
The type of valuation report or assessment used is determined by the purpose of the valuation, the client's instructions, and any applicable industry requirements. The different types of valuation reports are:
Automated Valuation Model (AVM) – This is not considered a valuation and not suitable for a range of purposes. The AVM does not involve an inspection or human input. AVMs are often used for quick checks or very low risk loan scenarios where credit risk or property risk is extremely low.
Desktop assessment – This is not considered a valuation. Desktop assessments include a review and analysis by a valuer without inspection, often on a 1 or 2 page report with some sales and basic property information.
Short-form valuation – This is a valuation and includes a full inspection and analysis, including risks, property features and associated commentary in a summarised report.
Property-pro valuation – This is a loan security valuation that includes a full inspection and analysis, including risks, property features and associated commentary in a summarised report.
Long-form valuation – A full speaking valuation report includes full inspection, analysis, risk, market and property commentary with detailed descriptions, methodologies and conclusions.
If your property is being valued using an AVM or desktop assessment, and you think a long-form valuation will provide a more accurate valuation, you can request a quote online from Opteon’s specialist, independent team or call 1300 40 50 60.
Opteon delivers a detailed, customised residential valuation report within 2–5 days depending on the nature and purpose of the valuation.
Depending on their policies and risk appetite, lenders may consider a range of residential property risks when assessing a property as loan security, including:
Exposure to environmental hazards or high-risk locations, such as flood-prone areas, high bushfire risk, contamination, land instability, or proximity to high voltage power lines, rail corridors and major roads.
Local market risks, including declining market conditions, limited buyer demand, oversupply, extended selling periods, or adverse economic influences affecting the property's marketability.
Building-related risks, including the presence of asbestos, combustible or non-compliant cladding, structural defects, significant deferred maintenance or incomplete construction works.
Property characteristics that may limit marketability or buyer demand, such as apartments that are less than 50m².
Title, planning or legal issues, including easements, encroachments, zoning restrictions, adverse covenants, heritage controls, or properties that do not comply with relevant approvals.
Any other factor that may adversely affect the property's value, marketability, saleability or suitability as loan security.
In some cases, these risks may result in a lender declining the application, reducing the amount they are willing to lend, imposing additional conditions, requiring further investigations or reports, or seeking alternative security before approving finance.
You can reduce the risks associated with securing a mortgage by being aware of the common issues lenders look for, obtaining pre-purchase finance, and including ‘subject to finance’ requirements within a contract of sale.
You should speak to your broker or banker to discuss the best approach for your situation.
Most residential property valuations for loan security are arranged by mortgage brokers or bankers who engage independent, licensed property valuers who are on a lender’s approved panel of valuation providers.
Banks, non-bank lenders and property owners, including investors, owners of SMSFs, governments, syndicated portfolios and REITs, also engage valuers directly.
Valuers can also be engaged by legal teams as expert witnesses.
To arrange a valuation by Opteon’s experienced team, you can request a quote below, on our portal online or give us a call:
National Director - Residential and Regional Valuation
michael.mcnulty@opteonsolutions.com
0458 550 143
Australian Tax Office. (2026). Retrieved from Market valuation of assets | Australian Taxation Office
Victorian Government. (2026). Retrieved from Valuation of Land Act 1960 | legislation.vic.gov.au
DISCLAIMER
This article is produced by Opteon Property Group Pty Ltd. It is intended to provide general information in summary form on valuation related topics, current at the time of first publication. The contents do not constitute advice and should not be relied upon as such. Formal advice should be sought in particular matters. Opteon’s valuers are qualified, experienced and certified to provide market value valuations of your property. Opteon does not provide accounting, specialist tax or financial advice.
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