- Auckland Council expects increased inquiries after new CVs showed an average 9% drop.
- Property owners have until July 25 to object, providing supporting information for their objection.
- Experts say CVs are outdated while council emphasises their use for calculating rates.
Auckland Council is gearing up for a barrage of inquiries and objections following the release of the city's new CVs last week.
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Head of rates valuation and data management Rhonwen Heath told OneRoof that the council had already received calls from property owners asking to speak to a valuer about their new valuation.
CVs dropped an average of 9% across the city since the last valuation, although some homeowners saw their valuation drop by as much as 20%.
Heath said the council anticipated increased inquiries at the beginning of every rate valuation period. Those unhappy with their new CV had until July 25 to object.
The online objection process requires property owners to supply supporting information for their objection, such as the value of work done at their property, recent comparable sales in the area, property features, and anything else that might affect the property's value.
“We're keen for them to realise that this is a robust process, it's a transparent process. It can be challenged.”
Auckland Council received 9000 objections (about 1.55% of the total valuations) to the CVs it assessed in June 2021, with about 50% of objectors complaining their CV was too high and 50% complaining it was too low.
“Those times were very different to times now. We [had] residential property increasing on an average of 30%. Now we're talking an average [drop] of 9% across Auckland.”
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Heath said one of the common misconceptions people had about CVs was that it was reflective of today’s sales prices and that was “absolutely not the case”, with the latest valuations taken in May 2024.
She told OneRoof that the sole purpose of CVs was to assess the rates bill. They helped the council split the cost evenly and fairly, so someone whose property was valued at $895,000 did not pay the same rates as someone with a $2m or $10m property.
CVs were calculated using a “mass appraisal” method where a third-party valuation companies analysed sales data, property features, and location electronically to reach a figure. The Valuer-General then independently audited the results before they were finalised and released to property owners.
Cotality head of research Nick Goodall says Auckland property values have dipped below where they were in May last year. Photo / Supplied
The CVs represented the likely selling price of a property at the date of valuation (May 2024), which meant by the time they were released to homeowners, they were 13 months out of date. It assessment process did not look at every house individually and excludes chattels such as curtains and appliances, which could boost a sales price.
Cotality NZ’s head of research Nick Goodall told OneRoof that he felt the Auckland CVs were a pretty accurate representation of the value of the city’s homes at the time they were taken.
“Of course, they're not perfect, like any valuation done without seeing the property.” He added that the price a property would sell for was only what someone was willing to pay. “But as a guide, they're certainly pretty accurate for the time.”
Goodall said that based on the latest sales data, Auckland’s CVs might have been hit even harder than the average 9% drop if they had been carried out this month.
“The other key thing here is that they're very old now. Have property values changed much since May last year? I think the Auckland figure has seen a further 2.7% decline since last year. People are going, ‘Man, it's a big drop’, but in many cases, people might find that their property would sell for less than CV right now.”
A real estate office in Auckland. Ray White Mount Eden owner Jared Cooksley says his agents are getting sales above CV. Photo / Fiona Goodall
Goodall pointed out that the 9% fall in CVs on average is for the entire Auckland region, and some suburbs have fared better and others worse.
“There can be differences across different suburbs. Those with greater land have held up better. Some central suburbs haven't done quite so well. It also reflects affordability differences. More affordable properties have held up better because there's generally more demand for those properties.”
Goodall said it was understandable that some homeowners were upset by the new CVs and expected people would challenge them especially because it was unusual to see them fall.
“People will be looking at [their new CVs] and saying, ‘It doesn't seem right to me’ and they might want to challenge it. They want to have a serious think about whether they want to do that because if they're trying to lift the property value, it is going to mean higher rates. Unless they're trying to sell it, it's probably not a worthwhile exercise.:
Homeowners who wanted a truer picture of what their home is worth now were better off looking at online automated valuation models.
“There are so many. OneRoof has its own. We've got our automated valuation model, which supports bank lending. These weekly updated values are really what people should want to understand for the value of their property right now. How you could use that to get on top of your mortgage, or if you're going to sell the property, what's the likely sale price?
“[Automated valuation models] are so prevalent these days that the CV is just a number on a piece of paper for the council to apportion your rates. I'm trying to drive that conversation.”
Ray White Mt Eden owner Jared Cooksley said several of his agents had done an exercise to compare the new CVs to what clients’ houses were actually selling for and most were well off.
“We've run it for Mount Albert, where Rachel Berry sells. She's a market leader there. We just analysed her last 20 deals. Across those, the most recent ones had about 15% over the new CV. It's a bit of an indication, really, of where [the new CVs are] sitting on average.
“We ran the same trial with Dean Tuffley in Green Lane. They're all selling for over. A CV is just an indication.”
Cooksley said his agents’ phones had been ringing hot since the new CVs had been released. “People are 100% checking what that means, looking at their CV and, rightly or wrongly, comparing that to the value of their house.”
“The average [difference] is about 15% for us in those central suburbs, but there are outliers as well. People who have done big renovations have potentially got a CV that's a lot lower or dropped a lot, when maybe the value of their property wouldn't have dropped as much as that.”
However, he didn’t think many people would challenge the CVs unless there was a big discrepancy.
Cooksley knew of one sale that had fallen over since the new CVs came out because the buyer thought they’d offered too much on the property. “They just felt like maybe they'd put too much on an offer compared to what the new CV came out with.”
He encouraged homeowners who were concerned about their CV to talk to an agent. “The actual improvement value and what they've done and the style and the features can be quite different. Again, that's why you need someone to actually visit the house and appraise it properly.”
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