By Guest Expert November 5, 2026

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The market has moved, but have the comparable sales? How valuers assess property when prices are changing

Property Investment
The market has moved, but have the comparable sales? How valuers assess property when prices are changing

Key takeaways

A recent sale isn't automatically a good comparable. How closely it matches the subject property matters just as much as when it is sold.

In a fast-moving market, the timing of comparable sales and the conditions surrounding them both matter.

Comparable sales aren't simply averaged to arrive at a valuation. Some evidence carries considerably more weight than other evidence.

An agent's appraisal and a formal valuation can produce different figures without either one necessarily being wrong.

The important question isn't whether the valuation matches today's asking prices. It's whether the available evidence supports the figure at the valuation date.

Talk to an agent who has just listed a property in a changing market and you'll probably hear some version of the same thing: the phone is ringing differently from three months ago. Enquiry levels have changed, buyers are behaving differently at open homes, and offers are coming in at numbers that might have seemed unrealistic not long ago.

Then the valuation comes back below what everyone involved in the sale was expecting.

That doesn't necessarily mean the valuer has missed what's happening in the market. It reflects one of the more difficult aspects of property valuation: the market moves every day, while the strongest evidence available to a valuer comes from properties that have already sold and settled.

It's a version of the same problem I've written about before when looking at why property doesn't behave like other asset classes. There's no ticker price for the house next door. Every property is different, transactions happen at different times, and even good comparable sales won't always give a perfect picture of conditions on the day a property is actually being valued.

So how do valuers work through that gap, and what should investors take from a valuation that doesn't quite line up with what they're seeing around them?

Property Value

Where the evidence actually comes from

A valuer doesn't arrive at a figure by getting a feel for where a suburb is heading. The starting point is evidence, and comparable sales are a major part of that evidence.

They show what buyers have actually paid for similar properties, which is different from what a seller hopes to achieve, what an agent thinks might be possible, or what an automated online estimate happens to spit out.

Finding the sales is only the first part of the job. The harder question is whether those transactions are genuinely useful for the property in front of the valuer, which means looking at the property's own characteristics, the circumstances behind each sale, and what was happening in the market at the time.

It also helps to understand what a bank valuer is actually looking for when inspecting a property. A valuation isn't about landing on a number that simply looks plausible. The evidence needs to genuinely support the assessment for whatever purpose the valuation is being prepared.

What makes a sale a genuine comparable

A property that sold down the road a few weeks ago can look like an obvious comparable. Sometimes it is. Often it isn't.

Take two houses that sold within a fortnight of each other. One has a larger block, a recent renovation and a better aspect. The other has a similar number of bedrooms and bathrooms but needs substantial work. Both are recent sales in the same postcode, but that doesn't make them equally useful evidence. A valuer will usually weigh up four things.

Timing

How long ago did the sale take place? In a changing market, a sale from several months ago can still be useful, but its relevance has to be considered alongside everything that's happened between the sale date and the valuation date.

Similarity

Land size, floor area, condition, layout, renovation quality, aspect and position all affect how useful a comparable really is. A renovated four-bedroom house with a pool and granny flat isn't necessarily a close match for another four-bedroom house simply because the bedroom count lines up.

The circumstances of the sale

Was it a normal open-market transaction, or was there something unusual about it, such as a related-party sale, an off-market deal or an unconventional settlement arrangement? Circumstances like these can change how much weight a sale carries as evidence.

Local conditions

Property markets don't always move uniformly, even within the same suburb. One part of a suburb can attract a different buyer profile from another, and housing stock can vary significantly from street to street.

This is why a valuer isn't simply taking the three most recent sales and dividing the total by three. Of the four factors above, timing tends to be the hardest to weigh properly, particularly once a market starts moving quickly.

When the market outpaces the evidence

Imagine a suburb where prices have been climbing steadily for several months. A property is inspected today, but the strongest comparable sales available all settled before the latest stage of that upswing.

Those sales can still provide useful evidence. They tell the valuer what buyers were prepared to pay for similar properties. What has to be factored in is how much has changed since those transactions took place.

The same issue shows up in a softening market, just in reverse. A newer sale might involve a less comparable property, while an older transaction could actually provide better evidence because the property itself is much closer to the one being valued. There's no blanket rule that says the newest sale automatically carries the most weight.

The valuer has to weigh the available evidence against conditions at the valuation date, not simply rank sales by how recent they are. The transactions have already happened, but the opinion they support is about the property's value today, not about whatever the market looked like when the sale was signed.

Weighing the evidence, not averaging it

Say three comparable properties have recently sold for $900,000, $940,000 and $980,000. At first glance, it's tempting to assume the property being valued should land somewhere around $940,000.

The prices alone don't tell you enough.

The $900,000 property might be almost identical to the subject property, but it sold several months earlier. The $980,000 property might have undergone a substantial renovation. The $940,000 property could be the most recent transaction but sit on a noticeably smaller block. Once those differences are factored in, simply averaging the three figures doesn't really tell you much at all.

This is where professional judgement comes into the process. The valuer has to determine which sales provide the strongest evidence, what adjustments need to be made, and how much weight each transaction should carry. It's also why a formal valuation can look quite different from the figure a property owner arrives at after searching through recent sales online.

An owner might find five properties that look similar on a listings site. The valuer is asking something narrower: which of those sales actually holds up as evidence for this property, on this date, for this purpose.

Why an agent's appraisal and a valuer's figure can land in different places

This is one of the areas that causes the most confusion for property owners and investors.

An agent is often very close to what's happening in the market. They're talking to buyers, running open homes, negotiating offers and watching competing properties, so they may have a well-informed view that buyers are now prepared to pay more than they were a few months ago. That information is genuinely useful, but it's a different exercise to a formal valuation.

A formal valuation is an independent assessment of market value, supported by evidence and made as at a particular date. So an agent might reasonably say, "I think we could get $1 million for this," while the valuation comes back at $950,000. That doesn't automatically mean somebody has made a mistake. The agent may be assessing what the property could achieve in the current selling environment, while the valuer is considering what the available evidence supports as at the valuation date.

The two figures can be quite close in a stable market. When conditions are changing quickly, however, the difference can become much more noticeable. Understanding why the gap exists is more useful for an investor than assuming the higher or lower figure must automatically be right.

What to do when a valuation doesn't match your expectations

When a valuation comes in below expectations, the instinct is to focus on the number itself. A more useful place to start is with the evidence behind it.

Which comparable sales were used? How recent were they? How closely did they match the property in terms of land size, condition, layout and location? What was happening in the market when those properties sold, and how does that relate to the valuation date?

These questions can help explain a valuation that initially looks surprising, particularly when the market has moved noticeably over a short period.

It's also worth being cautious with automated online estimates. They can process huge amounts of sales data, but the underlying database doesn't necessarily know why a particular property achieved its sale price. It won't know that a house had an unusual layout, that buyer and seller were related, that extensive work was required behind an otherwise tidy exterior, or that a supposedly comparable property was quite different from the one being assessed.

That's one reason professional judgement remains part of the process. Property isn't a standardised product, and the circumstances surrounding a transaction can matter as much as the number attached to it. Where a formal, independent figure is needed rather than an online estimate, a property valuation service in NSW works from the specific property, the available evidence and the purpose the valuation is being prepared for.

The evidence will always trail the market

There will always be some gap between what's happening in the market today and the sales that eventually become available as evidence. That's simply part of dealing with an asset that's unique, privately negotiated and traded far less frequently than shares or other listed investments.

A recent sale might be an excellent comparable, or a poor one despite being close to the valuation date. An older transaction can still carry real weight. Several sales might point in one direction while the characteristics of the subject property suggest something different. None of that makes the figure wrong. It means the number reflects a judgement call, and judgement calls hold up to scrutiny better than they hold up to assumption.

So next time a valuation comes in lower or higher than expected, skip the debate about whether it "feels right." Ask which comparable sales were used and when they settled instead. That one question usually explains more than the final figure ever will.

About Guest Expert Apart from our regular team of experts, we frequently publish commentary from guest contributors who are authorities in their field.