How accurate is the CV when valuing my home?
Figures presented by CoreLogic showed that the more expensive the property, the more likely it was to sell at a lower price compared to its CV.
In the past three months, homes with CVs higher than $1 million have typically been selling for prices 1–4% below their CV. Mid-priced homes with CVs between $800,000–$1M have typically been selling for prices close to their council value.
Homes with CVs below $650,000 are still selling for prices as high as 9% above their CV.So how is a CV calculated exactly?Property Institute of New Zealand Chief Executive, Ashley Church, says that the valuations are a ‘guesstimate’ rather than an accurate indicator of what a home is actually worth. “CVs are conducted once every 3 years and they’re a ‘snapshot’ of the approximate value of any given property at that moment in time.
They shouldn’t be regarded as an exact measure of the value of a home — and they’re certainly not intended to provide an ongoing price guide.”The methodology for a Council Valuation is very different to a formal valuation. A CV is a blunt instrument. It’s a computer based assessment of the value of your home based on what other homes in your area have sold for; whereas a formal Registered Valuation is conducted onsite and takes account of the condition of your home, any renovations you might have made, whether you have a pool, the number of bedrooms you might have, the condition of your home — all of the things that make it unique.
Mr Church says that the question of the value of your home has also been further confused by the recent proliferation of ‘free’ online home valuation services. “There are a couple of paid services that are getting much better at remote assessment – but the free ones are generally about as effective as reading tealeaves or chicken entrails and their advice should be treated with a grain of salt.”