Knowledge Hub

Accord Appraisals recently assessed a 30-hectare land parcel under an Environmental Conservation and Living Zone—uncovering significant risks that rendered it unsuitable for mortgage purposes.

Key Findings:

• Ongoing EPA Investigation – Unlawful dumping under scrutiny since 2020, with the latest notice issued July 3, 2024.
• Cost Burden – EPA levy $5-6M, with remediation costs potentially exceeding $10M.
• Market Impact – Low demand, extended selling period (12+ months), and remediation costs exceeding market value.
• Mortgage Risk – The property presented an unacceptably high risk, making it unsuitable for mortgage security.
• Have you encountered similar challenges in contaminated land valuations? Let’s discuss.

No two weeks are the same. Our team is actively assessing a wide range of properties across Victoria, New South Wales, and Queensland—from industrial developments to prestige residences.

Here’s a snapshot of what we’re working on this week:

Victoria:

• Industrial development sites in Shepparton and Melbourne’s inner north
• Residential development sites in Melbourne’s north
• Land banking site in Marshall (Geelong)
• Childcare property in Southeast Melbourne
• Multiple residential properties in Melbourne CBD and surrounds
• Residential properties in Point Cook and Tarneit
• Retail and office spaces in Southeast Melbourne

New South Wales:

• Contaminated land assessments in Outer North West and Central Coast
• Industrial properties in New Castle Region
• Over 7,000 acres of englobo land in the Port Macquarie region
• 32 residential apartments in Inner Sydney
• Block of 12 flats in Inner Sydney
• Development site in Jindabyne
• Prestige apartments in North Sydney
• Under-construction prestige dwelling in Sydney South
• Prestige residential properties in Newcastle and Inner East Sydney
• Under-construction dwelling in North West Sydney
• Multiple residential properties in Sydney’s inner suburbs

Queensland:

• Vacant residential lots
• Development sites
• Industrial development site

With a 2-3 day turnaround for residential properties and 3-4 days for commercial properties, we deliver timely and reliable valuations to support confident decision-making. Every valuation presents unique challenges—market trends, zoning complexities, environmental risks, and development potential.

We love what we do and the impact it has on informed decision-making for our clients.

1) Occupancy Permits/Certificates: Prohibition or Rectification orders from the local Council for non-compliant developments can result in substantial repair and remediation costs.
Valuation reference: Apartment building in Roseberry, NSW issued with a Prohibition order.
Impact on Valuation: 20-35% drop in Market value. Unsuitable for mortgage lending.

2) Combustible Cladding – Presence of combustible cladding and ensuring compliance with safety regulations can significantly affect a building’s value.
Valuation Reference: Apartments in Hughesdale, Victoria with significant cost of over $100,000 per strata apartment.
Impact on Valuation: 20% drop in market value Reduced market demand, limited buyer segment and uncertainty.

3) Water Damage & Building Repairs – Structural damage and/or repairs or water damage may impact the structural integrity and appeal of the development.
Valuation Reference: Apartments in Box hill and South Yarra, Victoria – Significant water damage and ingress in basement leading to repair costs of over $90,000 per strata apartment.
Impact on Valuation: 15-20% drop in market value.

4) Inland and Bay Views – Premium views (specifically harbour/bay views) and an optimal aspect (north-facing, for example) can significantly elevate the market value.
Valuation Reference: Apartments in Milsons Point, Sydney
Impact on Valuation: 15- 30% uplift in Market value for apartments with unrestricted Harbour bridge and bay views.

5) Car Parking –Lack of a car space or with a space in a car stacker can reduce market value and appeal compared to those with dedicated car spaces. Car stackers are not preferred due to their maintenance costs, frequent down times and inconvenience.
Valuation Reference: Apartments in St Kilda, Melbourne CBD and Sydney CBD Impact on Valuation: 5-10% difference in market value.

6) Floor Layouts and size – The layout of a unit can drastically impact its liveability and marketability. Dual living zones, practical layouts, and spacious living areas are highly sought after.
Valuation Reference: Various apartments and townhouse/Duplex Units across Vic and NSW.
Impact on Valuation: Variation of 10-15% in Market Value

7) Aspect and Privacy Issues – Overlooking from neighbouring buildings can affect privacy, reducing a property’s appeal and market value.
Valuation Reference: Various apartments and townhouse/Duplex Units across Vic and NSW.
Impact on Valuation: Variation of 5-10% in Market Value.

8) Building Amenities – Pools, saunas, tennis courts, and other amenities add significant value compared to buildings lacking such features. These however also result in excessive ownership costs sometimes impacting market value and demand.
Impact on Valuation: 5-10% difference in Market value depending on location.

9) Ownership Costs: Higher maintenance and Strata Owner Corporation Costs can be an impediment to the market value and marketability the Unit/apartment.
Impact on Valuation: Variation of 5-10% in Market value.

10) Location & Position – A property’s location within a sought-after area and its proximity to amenities, transport, and lifestyle offerings can greatly influence its value.

Impact on Valuation: Variation of 10-30% in Market value
Understanding these factors helps make informed investment and mortgage decisions.
If you need a professional valuation, get in touch with our expert team!

Beachfront properties are highly sought-after but valuing them requires a deep understanding of environmental risks. Here are key factors that impact market value

Coastal Erosion:
Land loss, restricted use, and net usable area reductions affect property valuation. Mangroves/natural vegetation are other considerations in the valuation.

Extreme Weather Events:
Climate change is increasing the frequency, strength and geographical coverage of Storms and Cyclones. These events cause significant damage to the property impacting the marketability and market value of the property.

Property repair and maintenance:
High salinity and humidity accelerates structural corrosion, rot, mould and other issues. Strong Coastal winds can necessitate frequent structural repairs and internal renovation/replacement including paint, glass, and moving parts in a building.

Planning and regulatory restrictions:
Redevelopment of coastal properties may be subject to stringent planning regulations impacting development potential, development density, aspect and development period. Property extension and modifications may also be subject to strict regulatory compliance restrictions. The Planning process may require compliance with multiple regulatory agencies.

Insurance and finance considerations:
Coastal properties (or those facing large water bodies) may be subject to tidal flooding, man-made or natural disasters. Property insurance may either be not available or be extremely costly. Banks and lenders consider this as high risk and may not offer mortgage on properties that cannot be insured.

Construction design and cost impact:
Construction costs are generally higher due strict regulatory compliance, need for specialized  weather-resistant materials and reinforced structural designs to withstand salt air, high winds, and flooding. Contingency allowances due to weather disruptions, construction delays, high insurance costs can escalate construction costs.

Conclusion and Recommendations:
The valuation of coastal beachfront properties must account for environmental risks to ensure an accurate market value assessment. Property valuers must integrate environmental impact as critical considerations to provide reliable valuations.

Accord Appraisals specializes in accurate coastal property valuations, helping lenders, investors, and buyers make confident decisions.

Ensure your mortgage valuations reflect environmental risks.