- The new average CV for Auckland homeowners is $1.29 million, but it's not a current market value indicator.
- Residential properties fell 9% in value since June 2021, while Great Barrier Island values rose 38%.
- Higher interest rates cooled buyer demand, leading to declines, but median house prices remain above pre-2020 levels.
The new average CV for Auckland homeowners is $1.29m, but the council has warned that the new rating valuations are not an indication of what a property would sell for today.
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Auckland Council announced details of the new CVs ahead of tomorrow's full release, more than a year after they were assessed.
Overall, residential properties fell 9% ($117,000) in value between June 2021, when the last CVs were taken, and May 2024, when the current crop were taken.
Commercial property values dropped 5% over the same period, but rising in value are lifestyle and rural properties (up 4%) and industrial properties (up 5%).
Some homeowners have done better than others. The council press release noted that properties in Great Barrier Island had risen 38% in value since June 2021, while property values in Rodney district stayed the same.
The CVs of homes on Great Barrier Island have risen 38%. Photo / Will Trafford
The council also noted smaller-than-average value drops (1-4%) for property owners in the local board areas of Hibiscus & Bays, Upper Harbour, and Franklin.
The council highlighted steep value drops of between 13% and 14% for homeowners in the local board areas of Puketâpapa, Albert-Eden, Maungakiekie-Tâmaki, Waitematâ, and Whau. It suggested the drops were influenced by variations in individual markets.
It also cited the reduced demand for properties with development potential for the larger value declines in Mângere, Henderson, Massey, Glen Innes, Point England, and Panmure.
Auckland Council chief economist Gary Blick said: "At the time of the 2021 rating valuation, the Official Cash Rate had been at an all-time low. We saw exceptionally low mortgage rates and strong upward pressure on property prices.
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"In contrast, the 2024 rating valuation, in May 2024, occurred when the OCR had been lifted to its recent high of 5.5 per cent. Higher interest rates cooled buyer demand, leading to a decline in property prices.
“Despite that fall, the median house price in May 2024 was still above the level just prior to the OCR cut of March 2020, and that remains the case today. The recent economic cycle — with its unusually steep climb and fall — helps explain why some properties have had swings between the two rating valuations.”
The council press release underlined the purpose of the ratings and made clear they should not be used as a guide to house prices. "Rating valuations allow rates to be fairly shared. Council valuations do not accurately reflect a property's current market value and should not be used for insurance or mortgage purposes."
Ray White Manukau co-owner Tom Rawson said the new CVs might be closer to the current market value in his patch. Photo / Fiona Goodall
Auckland real estate agents told OneRoof homeowners would be examining their new valuations closely, and even though they may not be a true reflection of the current market value of a property, they still mattered to people.
However, whether they were still relevant was “negligible”, Ray White Manukau co-owner Tom Rawson said, pointing out that they were carried out 13 months ago.
Most of the properties his agency was currently selling in South Auckland were going for below their 2021 CV, so the new CVs might be closer to the current market value.
Rawson expected to see dramatic changes in the CVs of properties whose development potential had been impacted by flooding issues or water constraints.
Ray White Mount Eden owner Jared Cooksley said: “Everyone is going to look. They are going to say, ‘I think my house is worth $2m. What does my CV say?’ And if it comes in at $1.5m, our phones will be ringing with people wanting to confirm that is the price.”
Agents say first-home buyers may latch onto the new CVs. Photo / Fiona Goodall
Cooksley said he would definitely be interested to see how the new CV compared to some recent sales in central Auckland but it would probably take six months for people to work out what the new CVs meant for actual market values.
While a big drop in CVs might not go down too well for some vendors, it could also be a positive for buyers, who might see the lower CV and suddenly think they could have a chance of buying.
Harcourts salesperson Alex Dunn, who sells in South Auckland, said people were already looking at the 2021 CVs and factoring in a 10% drop.
“It’s definitely going to matter. I think it will be really difficult in the next six to nine months to get something over CV without any justification," he said.
“I think buyers are going to hold really strongly to that new CV price and say, 'Well, that’s what the council says it’s worth, so that’s what I’m going to pay.'”
Dunn expected properties that now had water constraints would suffer. He had recently appraised houses in Otara and Papatoetoe that had CVs well over $1m, but were due to being in the red zone, were now only appraised at around $750,000 to $800,000.
Dunn was hearing feedback from owners that they were worried their CVs were going to drop, but said that based on the current market, “it was hard to justify them going up”. “I don’t think there will be too many happy people.”
Valocity senior research analyst Wayne Shum said people were always going to view CVs as a "ballpark figure" but warned homeowners against putting too much emphasis on them.
“At the end of the day, CVs are only used for council to distribute their rates burden.”
Shum said there had also been other market changes since May 2024, which was another reason why the CVs were outdated.
He expected the suburbs where there were a lot of townhouses or suburbs in South Auckland with development sites due to diminished demand might see bigger drops, but did not expect to see such a big change in the value of residential houses.
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