Are CV's a reflection of a homes value?
I frequently get asked the following question - are homes on average selling above or below CV?
Let’s be clear - medians and averages give a good guide on property trends only. I prefer more detail about the home to give a more specific and accurate answer to this question.
I look at the medians and averages based on similar homes that are comparable to that particular home.
For example, a home with a large land area that is potentially sub dividable (over 809m2), I would look at the CV vs sale prices of only those homes that have sub division potential. Or a home that has been fully renovated throughout, I would look at homes in the same condition. The same could be said for the average days on market (the timeframe a home is listed to when it sells) and sale price.
What is a CV?
CV stands for capital value. It is an estimate of the total value of a property, taking into account a variety of factors including value of the actual land itself, the value of your house, any other improvements you have made to the land, the location including school zones, and recent house sales in the area. It does not include renovations you have carried out to the home or the zoning the section is in under the unitary plan (this applies to large sites only).
All Auckland CVs are calculated every three years by Auckland Council, the most recent was carried out in the peak of the market in 2016 and issued in 2017. The next revaluation will be around late 2020. When they are released, CVs will already be nearly half a year old, so they're a reflection of what happened not what will happen. We're not expecting them to have a real impact on values.
CVs are calculated using mass appraisal techniques - meaning valuers don't personally visit and assess every single home.
In 2014, Auckland CVs grew by an average of 33% and in 2017, it was around 40%
Do increased CVs flow through to increased sales prices?
Buyers do tend to question what the CV is as a matter of interest and sometimes to give them an initial guide as to a homes potential value is however they make their assesment primarily on recent sales, market climate and current comparable homes for sale. CV's are not a direct reflection of the market value.
A good example of this is before the latest CV’s came out, buyers typically were paying well above these figures.