Sales Comparison & Direct Comparison Method

Node 36110 addresses the sales comparison method, also known as the direct comparison method, the most widely applied valuation methodology in the Australian residential and broader property market. The method derives an opinion of value by analysing recent sales of comparable properties and adjusting the sale prices achieved for material differences between each comparable property and the subject property.

The method is most reliable where an active and transparent market exists for broadly similar properties, such as established residential dwellings, standard commercial strata units, or vacant residential land. The valuer identifies a set of comparable sales, verifies the sale details, and applies adjustments for differences in factors such as location, land size, building area, condition, and date of sale, before reconciling the adjusted evidence into a single opinion of value or a rate applied per unit of area.

This node serves valuers, lenders, purchasers, and vendors seeking to understand how the most common Australian valuation method operates, complementing the other core methodologies addressed in nodes 36120, 36130, 36140, and 36150.

This node addresses the sales comparison method, including the selection, verification, and adjustment of comparable sales evidence. It does not address the income capitalisation method, addressed in node 36120, the discounted cash flow method, addressed in node 36130, the cost or summation method, addressed in node 36140, or the hypothetical development method, addressed in node 36150.

It does not address the data sources from which comparable sales evidence is sourced, addressed in node 36420, nor the fundamental principles common to all valuation methods, addressed in node 36100.

• Valuation of Land Act

  State Valuers-General

  (state-based, for example the Valuation of Land Act 1916 (NSW) and equivalent legislation in other states) establishes the statutory basis on which market value derived by the sales comparison method is applied for rating and land tax purposes.
• API/IVSC Professional Practice Standards

  Australian Property Institute & International Valuation Standards Council

  Set the methodological standards governing the selection, verification, and adjustment of comparable sales evidence.
• Real Property Act 1900 (NSW)

  State land titles registries

  And equivalent state Torrens title legislation provides the registered title and land parcel data that underpins the identification and description of comparable sales used as market evidence.

The application of the sales comparison method varies with the depth of the comparable sales market available for the subject property.