Why Property Values in Australia Keep Rising
Home values in Sydney and Melbourne continue to climb based on a mix of tight supply, stronger buyer activity, and improving sentiment as interest rates are expected to drop throughout 2026, keeping pressure on prices and rents in investor‑heavy corridors, especially around Melbourne’s outer growth areas.
For owners and investors in suburbs like Werribee, Tarneit, Cranbourne, Clyde, Epping and Wollert, these dynamics elevate the importance of evidence‑based valuations for CGT, SMSF reporting, pre‑purchase, and pre‑sale decisions.
What’s driving prices in 2025
Home values are being supported by a mix of undersupply, renewed buyer activity, and expectations for easier borrowing conditions over the next 12–18 months, even as construction bottlenecks constrain new stock. With listings tight through the spring cycle and investor participation lifting, competition is amplifying in affordable, investor‑heavy suburbs where rental yields remain comparatively attractive.
Why high‑tenancy suburbs keep attracting investors
In Melbourne’s outer growth corridors, strong rental demand, relative affordability, and steady population inflows have kept tenancy rates elevated compared with owner‑occupier suburbs. These submarkets respond quickly to shifts in sentiment because small changes in borrowing capacity or rental vacancy can translate to more bidders at open homes and higher clearing rates. Investors targeting long‑term holds should align portfolio moves with defensible valuation evidence, not just headline growth.
CGT valuations for investors in a rising market
When selling an investment or changing a property’s use, a capital gains tax (CGT) valuation provides a point‑in‑time market value that underpins the cost base and the final gain calculation. In rising markets, timing the valuation date matters: it determines which comparable sales are relevant and how time adjustments are applied, which can materially affect your assessed gain. A compliant report clearly states the valuation date, valuation approach, comparable sales and adjustments, and any limitations, so your accountant can lodge with confidence.
Typical CGT triggers: sale; first rented date after moving out; inheritance and later disposal; substantial renovations where records are incomplete.
What “comparable” means: in Werribee, Tarneit, Cranbourne, Clyde, Epping or Wollert, evidence should account for lot size, estate stage, builder incentives and recent supply, not just bedrooms and land size.
SMSF property valuations: frequency and evidence
Trustees must report assets at market value each financial year, using objective, supportable evidence; formal independent valuations are commonly obtained at least every three years or when a material change occurs (significant market movement, renovations, change of lease, or development). In a fast‑moving market, obtaining a fresh independent valuation sooner can be prudent to substantiate year‑end statements and satisfy auditor expectations. Reports should document approach, assumptions, inputs, comparable sales, and outcome to meet ATO guidance.
Pre‑purchase valuations: don’t overpay in a competitive cycle
Pre‑purchase valuations anchor negotiations to local evidence rather than campaign hype. In Melbourne’s high‑tenancy corridors, prices can diverge based on lot orientation, local amenity, transport, and build specification. A pre‑purchase assessment helps avoid overpaying, identifies risks (e.g., incentives that inflated a benchmark sale), and clarifies fair value under current conditions so finance and offer strategy align to reality.
Pre‑sale valuations: price with precision, not hope
A pre‑sale valuation provides a realistic price guide grounded in comparable sales and the most recent market trend, reducing time on market and back‑and‑forth with buyers. For renovated assets, documenting capital works and presenting recent, like‑for‑like sales helps justify the asking range and improves buyer confidence during due diligence. In suburbs with fast new‑build turnover, careful treatment of builder rebates and incentives in the evidence set is essential.
What an ATO‑aligned valuation should include
A valuation intended for CGT or SMSF purposes should identify the valuation date, outline the method (commonly a direct comparison), present comparable sales with time and quality adjustments, and disclose limitations in plain language. This structure meets ATO expectations for objectivity and supportability and reduces post‑lodgement queries. In investor‑dense suburbs, the rationale should explicitly address incentives, stock mix, and supply stages so the conclusion is defensible.
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