Real Estate Algorithms – (Not) The Gospel, According to Dene

Welcome to the final edition of my Blog for 2025.

In this issue, I want to unpack a few more truths about real estate - this time, focusing on real estate algorithms.

Let’s begin with a simple definition: an algorithm is a finite, clear set of instructions designed to solve a problem or perform a calculation. In practice, it takes input data and follows a step-by-step process to produce an output.

Put simply, the automated property valuations you see on platforms like RealEstimate, Pricefinder, RP Data, and the many bank-owned tools are all real-time calculations based on available sales data. They use basic property features - bedrooms, bathrooms, car spaces, land size, and so on, to estimate value.

What they don’t apply is emotion. And that’s exactly where algorithms fall short, particularly in that most people buy emotionally and justify logically later.

Here’s a recent example: a 2x2x2 unit in Indooroopilly.

Platform	Estimated Value
RealEstimate	$810,000
RP Data	$850,000
Pricefinder	$850,000

I sold this property unconditionally last week for $875,000.

Another example: a 4x3x2 home on 607m² in Redland Bay.

Platform	Estimated Value
RealEstimate	$900,000
RP Data	$950,000
Pricefinder	$960,000

I sold this home a few months ago for $1,040,000.

These results don’t make me a superstar - what they do is highlight how risky it can be to rely solely on an algorithm for property value.

A home’s true worth is shaped by many factors, varying suburb by suburb. At its core, value comes down to the age-old principle of supply and demand, combined with strategic marketing and skilled negotiation.

And remember at the heart of every transaction is the buyer. In every sale I’ve handled over the past 35 years, there has always been a gap between what sellers hope for and what buyers want to pay. That’s completely normal - but be aware that buyers are also being influenced by these same automated valuations.

A personal example: my daughter and her partner recently bought their first home. It was the 19th property they’d made an offer on in just three months. They missed one property by a staggering $260,000. It’s a minefield out there.

I regularly provide Desktop Appraisals for Clients to help keep them informed about how their home is tracking. But I always include a caveat: if you’re serious about selling, a physical inspection is essential. It’s the only way to understand the nuances that truly affect value.

So, here’s the takeaway: use algorithms as a guide - not the gospel - when buying or selling. They’re helpful, but they’re not definitive.

Thank you for your support throughout the year - I genuinely appreciate it. I’ll be available across the Christmas and New Year period, so please reach out if you need anything.

Merry Christmas to you and your family, and if we don’t speak beforehand, I look forward to seeing you in 2026.

Thank you.