Confused with property estimator apps/websites which show my house price has gone down significantly

I purchased a 4 bedroom house in St Marys NSW in Q3 last year. My friend bought 3 bedroom house in Greenacre NSW in March 2015 and paid around 900K. CBRE did valuation of my property on behalf of ANZ in March 2016 and it was worth more than $710k.

Here is what I noticed in last couple of months:

  1. When I checked domain price estimator today, the price of my house has gone up by only $13k (medium confidence) however the friend house price has gone up by $75k (high confidence).
  2. When I checked CBA property estimator today, the price of my house has gone down by $38k however the friend house price has gone up by $35k(high confidence).
  3. When I ran free report via BOQ app, it was showing $690k to $850k range in Sep15 which has been reduced to $550k to $690k range in May16.
  4. When I checked the trends on realestate.com.au, the median house prices in St Marys has gone up by $16k between Sep15 and April16 and medium house prices in Greenacre have gone up by $23k in the same period.

Summary: House price has gone down instead of staying steady although the growth trend is almost same between St Marys and Greenacre. I am totally lost why house price has gone down in CBA and BOQ estimator.

Any feedback please?

Comments

  • Expect your house price to go down even further.

    Sydney's housing prices are overvalued and as growth slows, there will be a fall in house prices.
    Hopefully those Asian investors who spent $24 billion on Australian real-estate in the past 7 years will go back to where they came from. I mean it.

    The 'Sydney boom' is over.

    • what about the americans and brits buying property?

      • +7

        Americans and Brits are our allies and friends. Most of them are not laundering their money. We need to decrease our dependency on China.

        You can bet that at least some of these Chinese investors are laundering illicit funds into our property market. It's an established fact according to AUSTRAC

        • true that..but then why is the government silent on this? Why are the casinos rolling in cash? How do you know the americans are not laundering the cash?

        • +2

          could it be the nsw government has benefited from all the stamp duty collected and thats why they are silent?

        • +2

          and from what I have witnessed in my street over the past year. Amazing prices paid by Chinese (straight from the mainland - one can tell) for very average houses.

          Do not neg me for this is the truth :o)

        • @stockastics: This boom has been driving the economy since the peak of the mining boom

        • @elektron: i know..i am wondering if there is anything else which will prop up the economy once the investors leave as per the comments above. Manufacturing is going down. Construction would go with realestate. So services would be the only thing left. If you use Telstra as a proxy for that, then we are not doing well at services either. The house prices in Sydney are certainly unaffordable at the moment, but to just blame a certain subsection seems a bit xenophobic..

        • +3

          @stockastics:

          Yep, the economy is cactus. We haven't had a recession for exactly 25 years, so well overdue for one. And this time no more surplus budget to use for financial fire fighting.

          Ah, the good old age of political correctness when you can't calling a spade a spade anymore for the fear that the spade may call you a xenophobe. How exactly is it xenophobic if this is both a statistical and an anecdotal phenomenon, and whole apartment towers are being built aimed at the Chinese buyers.

          Have you heard of towers being built at US or British investors?

        • @elektron: Foreign purchases of U.S. real estate have soared since the financial crisis, jumping to $87.3 billion of completed deals last year, from less than $5 billion in 2009.

          I am not accusing anyone of being a xenophobic..but I am not sure if you have travelled to the US..you will find many such appartments which you referred to..

        • @stockastics:

          I'm confused. What does US real estate have to do with this? I thought we were talking about Sydney.

          I am not accusing anyone of being a xenophobic

          What about this?

          to just blame a certain subsection seems a bit xenophobic

    • Oh my that is way too specific to be politically correct.

      Having said that I wouldn't disagree with you on the sentiment though.

    • +1

      I wouldn't hold my breath waiting for significant price drops any time soon. We don't have the same boom & bust cycles other economies do, irrespective of how the market became artificially inflated.

      Sure, the portents all indicate that the "boom" is coming to a close, but it will more likely just plateau out for a few years before correcting itself.

    • And if this article on Port Douglas mansions being savagely slashed for not selling:

      http://www.domain.com.au/news/prestige-property-prices-dive-…

      ….is not proof enough that the billionaire Chinese buyers are no more to be found!

  • +1

    Taking a stab, I would say that these "price estimators" are just that, estimators. They'll have the recent sales that company knows about, but if they don't update their tables as often or if they don't all use the same data, guess what? You get different answers. Maybe a house on your street recently went unsold at auction and they value that differently?

    My reading of the spread of answers would be that your house is worth about the same, your friend's house might be worth a bit more. But honestly unless you're planning on selling or re-mortgaging soon I wouldn't worry about such short-term fluctuations.

    • Unless there is change in circumstances, I am not worried about selling it for at least 10 years.

  • ^^estimators are exactly that…estimates
    its no better than weather forecasters that just say chance of rain every day….its never wrong

    **
    Estimated market price is an estimate of a property’s potential market price based on external property data and CommBank’s own data. It is a guide only and does not take into account all factors that may affect a property’s value. It is not a Bank valuation for credit assessment purposes.

  • Look at the trend over the past twenty or so years, then just the past 10 years and then the past 5 and the last couple. I mean past performance is not an indicator for future performance and so on but you wont get any meaningful insight by looking just between September 2015 - April 2016 more or less because of the nature of economic cycles. If you aren't able to make sense of why your house prices may be falling after looking at the data then consider the possibility of a housing bubble starting to pop.

  • I'm no expert but here is my understanding.

    These "valuation" are just statistically estimation based on properties that have been sold recently around your area. Meaning the different set of data each bank uses will affect the estimate.

    Most of banks "valuation" are powered by RPdata, I think they use different set of data that's why the estimations are all different.

  • +3

    Just ignore it, it's only a guess from a computer. An estate agent might give you a better estimate of what you could sell for, but even they are influenced by several factors that can affect what they say based on whether they are wanting you to sign up.

    The only way you will find out what your house is really worth is to sell it, and since you are not planning to for 10 years it doesn't matter what it is worth now anyway as long as you can pay your current mortgage.

  • I don't know about Sydney, but in Brisbane, you can't really trust the estimator app/sites. Just this morning I got a summary of house sales in my area from one of the sites that I am signed up to. The site estimated the property to be worth between $585k and $715k, with $650k being the calculated estimate. The house recently sold for $799k.

  • All these estimator apps do is show you that certain areas have higher value properties than others. It's not down to specific properties as it suggests. You will probably find that a "renovators delight" in your street would have a similar value. They are based on statistical values so if the area has a number of large value sales the prices will show to have increased. Likewise if you purchased a 3 bedroomed house, renovated it and changed it to a 5 bedroom house, the value on the app will still be based on its original size when you purchased it which adds further inaccuracy to the equation.

    • … until your renovated house is sold and gets into the statistics and will affect the estimate.

  • Also do not worry about estimates as they change according to boom or fall. You only worry when you need to sell. I do not take up on numerous agents' offers to give me a house estimate as it is all so irrelevant now when I am not about to sell.

  • +1

    Searching for properties that have recently sold around your area with simillar specs will give you a better idea of what your house is worth.

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