In the ever-changing Australian property landscape, whether you're a first-home buyer, investor, or homeowner looking to refinance, understanding the difference between bank valuation and market (property) valuation is more important than ever. These two terms might sound similar — but they serve very different purposes and can significantly affect your finances, borrowing power, and overall strategy.

What is a Bank Valuation?

A bank valuation is the price a lender (usually a bank or financial institution) believes your property is worth for loan purposes. This value is typically determined by a licensed valuer selected by the bank.

Key Characteristics:

• 
  

        a) Conservative Estimate: Banks are risk-averse, so valuations often come in lower than

             expected.

•       b) Used for Loan Approvals: The valuation determines how much the bank is willing to lend.

•       c) Quick-Sale Perspective: Based on how much the bank could recover if the property had to be sold

             fast in a default situation.

•       d) Usually Paid By Borrower: Some banks charge a fee for the valuation; others may waive it

             depending on your loan type.

  
  

  Example:

  You buy a house for $900,000, but the bank’s valuation comes in at $850,000. This means your borrowing capacity is based on $850K, and you may need to make up the difference.

  
  

  
  

  What is a Market (Property) Valuation?

  
  

  A property valuation, often referred to as a market valuation, is an estimate of how much a property would sell for in the current market conditions. It takes into account a wide range of dynamic factors such as:

  •    1) Recent comparable sales

  •    2) Market demand and trends

  •    3) Location and amenities

  •    4) Property condition and presentation

  •    5) Renovations or future development potential

  
  

  Key Characteristics:

  
  

  •    a) Reflects Real-Time Market Value: Helps set realistic selling or buying prices.

  •    b) Used for Sales, Investments, and Insurance: A must-have for investors and property owners.

  •    c) Performed by Independent Certified Valuers or Real Estate Experts.

    
    

    Why Do Bank and Property Valuations Differ?

    • 
      

      1) Purpose: Bank valuations protect the lender; property valuations reflect open-market value.

    • 2) Methodology: Banks focus on risk and resale in a downturn; market valuations consider current trends and

           buyer demand.

    • 3) Valuation Date: Even a few weeks’ difference can affect results in a volatile market.

      
      

      Why This Matters in 2025

      
      

      With Australia’s property markets heating up again — especially in regions like Adelaide, Brisbane, and Perth the gap between bank valuation and market valuation has widened for many buyers and sellers. Underquoting, bidding wars, and off-market transactions can make these differences even more pronounced.

      
      

      If you’re:

      •    a) Buying: Know the bank may value your property lower than the price you pay.

      •    b) Selling: Don’t panic if a buyer’s bank valuation comes in lower — it doesn't always reflect your home’s real

                worth.

      •    c) Refinancing: A low bank valuation can affect your ability to access equity.

        
        

        Final Thoughts

        
        

        While both valuations aim to estimate the worth of a property, they serve distinct goals. Knowing the difference between a bank valuation and a property valuation empowers you to make smarter financial decisions, negotiate better, and avoid surprises during your property journey.

        
        

        If you're planning a purchase or sale, get both valuations done — and always work with a trusted valuer or advisor who understands the local market nuances.

        
        

        Boost Your Confidence in Every Property Decision

        Want expert help navigating valuations or understanding your property’s real worth in today’s market? Reach out to a certified valuer or a real estate professional in your area.