How Is Property Value Determined? The Factors Behind Valuation

There's no exact answer to 'what is my property worth' without reviewing the property and its surroundings. But understanding the factors that determine value can help you set a realistic expectation.

Location: The Most Decisive Factor

District, neighborhood, distance to main roads and the city center, and access to public transport: location is the single most fundamental factor determining a property's value. Two properties of the same size can carry very different values depending on their location.

Size and Usable Area

The difference between gross and net square meters matters for understanding a home's real usable space. For land and farmland, total surface area should be assessed alongside the parcel's shape and usability.

Zoning Status and Title Classification

A parcel's building rights (TAKS/KAKS), or a home's alignment between zoning and title status, directly affects value. Any mortgage, lien or annotation on the title deed also significantly affects value and how easily a property can be sold.

Building Condition

Building age, construction quality, compliance with the seismic code, and maintenance condition are among the technical factors affecting value in residential and commercial property.

Access, Infrastructure and Intended Use

Access to infrastructure like roads, water, electricity and natural gas, and whether the property is suited to residential, commercial or agricultural use, are practical factors that must be considered in a valuation.

Comparable Sales in the Area

Current sale prices of similar properties in the area are the most concrete reference point for a realistic valuation. A price estimate made without comparable analysis generally ends up disconnected from reality.

Valuation Methods

• Comparable sales: comparing with recent sales of similar properties in the same area
• Cost approach: adding land value to the cost of rebuilding, less depreciation
• Income approach: turning the rent a property earns or could earn into a value, especially for leased commercial property

When Is an Official Valuation Report Needed?

A report prepared by an SPK-licensed valuation firm is required when a bank mortgage will be used, in official processes such as a citizenship application, and in some commercial transactions. A valuation conversation held only to get information or set a sale price does not count as an official report.

What Raises and Lowers Value

• Raises: clear zoning status and high building rights
• Raises: a clean title record and a building that meets the current earthquake code, with permit and occupancy certificate
• Raises: proximity to transport and infrastructure
• Lowers: zoning uncertainty and a mortgage, lien or dispute on the title
• Lowers: a missing occupancy or building permit, or tangled shared ownership

Conclusion

A realistic valuation requires reviewing all of these factors together. We never give a fabricated figure; we review your property and its surroundings together with you to give you a concrete value range.