A quick guide to working out how much you should pay at auction

At the end of the day Gold Coast property is worth whatever people will pay for it at auction. However, to make sure you don't lose money when you sell years down the track, it's worth doing your research and using tried and true methods to work out a rough indicative value to go by. 

This number will be incredibly useful when setting an upper limit for your bids, and helping to ensure that your property's value will increase relative to its sale price after you buy. So without further ado, here are the basics of estimating a property's value before bidding.

Look at recent sales of nearby properties

The comparative sales method is perhaps the most commonly used and simple method of working out a property's value. All it entails is researching the most recent sales of comparable properties that have occurred in your area.

By looking at a wide range of properties you can work out an average figure, which you'll be able to use to estimate your property's value. When using this method keep in mind that features like extra bedrooms, special views and recent renovations can affect sales prices.

Research your suburb's average sale price

Looking at your suburb's mean property value won't help much if your property is far from average (e.g. a 10 bedroom mansion or a luxury penthouse). However if you're purchasing something more modest, and you're entirely unsure of what it's worth the suburb or street's average sale price can be a good place to start. 

For example if you were to purchase a two bedroom unit on Beatty street in Southport, where Residex puts the average value at $497,198, you'd know not to stray too far from that amount when bidding. 

Consider what direction the market's going

Whenever estimating an ideal purchase price at auction, you should always consider what direction the market is heading. This is because any estimations you may have, will be quickly put out by movements in average values. 

If you were to look at the Gold Coast in general you'd expect prices to increase, and adjust your bid accordingly. According to the National Australia Bank's Residential Property Survey and Quarterly report, Gold Coast property's average value increase by around 5.6 per cent in 2016, and is expected to experience larger than average growth in 2017.

While this may not have a massive effect on your valuation at the moment, if the rate of the Gold Coast's value growth continues to increase it may be worth considering in future. 

If in doubt, always get a valuation

If you're not entirely sure of what the property's worth and your not confident in your ability to estimate its value you should always purchase a valuation. This will cost roughly $300 in high density areas, and as much as $1,000 in certain rural areas, according to onproperty.

For this cost you'll receive a detailed report, including an estimate of the property's value. While this may seem like a massive cost at first, it's nothing compared to the peace of mind you'll gain knowing the value of what you're buying, or the money you'll save by not bidding on an overpriced property. 

If you're ready to take the next step, or if you need a hand deciphering a property's value, get in touch with your nearest Ray White office in Surfers Paradise. We're locals around here and have been for years now, so few people know the property market better than us.