Nicola Kelland - Council Valuations

How does a home’s CV relate to the market value of a property?

Often when I am working with owners and purchasers, the topic of a home’s Council Valuation (CV) comes up in conversation. For many purchasers, they see the CV as a guide to the value of a property. While this can be true in some cases, often it isn’t. Auckland City Council explains their valuation process below:

The current CVs of 2011 are based on the average capital value percentage changes between the previous and new rating valuations by suburb.

The value movements are averages for the suburbs. Value movements for individual properties will vary depending upon a number of factors including age, size and construction type of any improvements and more importantly location.

Capital value is an estimate of the probable selling price of the property as at the effective date of valuation. The effective date of valuation for the 2011 Auckland Council revaluation is 1 July 2011.

For a variety of reasons, CVs can be unrelated to the market value of a property. We see this often when a property has not been sold for many years, or has had extensive renovation work completed. The current Auckland Council CVs are now nearly 2 years old, and when looking at the various suburbs and areas, the percentage increase in the sale price to CV is clearly emerging.

While it can vary dramatically month to month depending on the sales, a small snap shot of March sales in comparison with CV, indicates the following:

As you can see there is quite a variation between the areas. My advice is “don’t get hung up on CVs” when determining value, it may be right or it may be wrong.

Statistics are obtained from the Real Estate Institute, Kellands data and RPNZ.  

Whilst we believe them to be accurate we cannot verify this and take no responsibility for any inaccuracies.