Auctions this week showed that the city’s new CVs are out of step with the realities of the housing market – just not in way some homeowners would like.
The latest valuations were delayed by nearly two years, so the numbers that most homeowners received are considerably higher than those issued in July 2017.
But some of the sale prices achieved at auction this week were below CV, although a few were much higher.
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“CVs are a pain. They’ve been the bane of our lives ever since I’ve been doing this and absolutely irrelevant,” said Barfoot & Thompson auctioneer Murray Smith.
Smith pointed to a property at Karaka Park Place, in Glendowie, that passed in at auction this week at $2.2 million. Five years ago, its CV was $1.85m, now it is $2.375m.
“We’ve not had vendors holding out for CV number yet, but it will come.”
A brick house on Wellesley Road, in Mangere Bridge, sold for $1.926m but buyers barely noted its CV increased from $1m to $2m. Photo / Supplied
Smith pointed to a pair of properties his own neighbourhood with CVs of $2.6m and $2.55m. Both are on similar sized sections, but one is fully renovated with a $500,000 pool and pool house, the other, with a CV of just $50,000 less, is a dilapidated “absolute wreck”.
“It will need squillions spent on it, while the other one would fetch $3.8m to $4m,” he said.
Of the 361 Auckland auctions that OneRoof tracked this week, 238 passed in. Of the 86 sales where OneRoof was able to track the sale price, 30% came in under their new CV.
The average dip was 14%, although one property in Ellerslie fetched a sum that was 38% below CV.
Those fetching less than their new CV included a decased estate on Pencarrow Avenue, in Mt Eden, which sold for $4.28m, well below its new CV of $5.9m, and a five-bedroom villa on Landing Road, in Titirangi, which sold for $2.025m against a CV of $2.525m.
Also "struggling" was a one-bedroom concrete block unit on Edmonton Road, in Henderson, which was sold under court orders and got just $400,500, nearly $140,000 below its CV, and luxury home on Killarney Street, in Takapuna, which sold for $6.25m, below its CV of $6.41m.
Bayleys agent Lorraine Young, who sold a house on Wellesley Road, in Mangere Bridge, for $1.926m at auction, said that property’s CV hadn’t been an issue.
She said the large site was zoned for development and “a perfect site for townhouses”.
“So many people came out of the woodwork - investors and developers. Four bidders drove the price above the pre-auction offer of $1.575m to $1.926m - just a smidge under its new CV of $2m CV and nearly twice the 2017 CV of $1m. We didn’t expect that huge interest.”
A brand new house on Arney Road, in Remuera, sold at auction for $5.85m - well above its new CV of $3.6m. Photo / Supplied
Also at Bayleys’ auctions this week, a brand new five-bedroom luxury house on Arney Road, in Remuera, sold for $5.58m – well above its new CV of $3.6m.
Agent Sarah Liu, who marketed the 659sqm double grammar zone property, said the CV did not make sense.
“You’d be looking at $3.5m to $4m for the land alone on Arney Road. And then you’ve got a brand new beautiful house, very elegant inside.
“The council doesn’t look inside a property to see the finishes or the swimming pool. CV is not a market value.”
Liu said that just two bidders were able to bid, with another five would-be buyers unable to get finance sorted in time for the auction. “Last year, we would have had at least two or three more people bidding, and maybe sold for over $6.2m,” she said.
"Many of the buyers now need a long settlement to give them time to sell their home.”
A lifestyle property at Old Railway Road, in Kumeu, sold for $2.77m - well over its new CV. Photo / Supplied
Martin Cooper, owner of Harcourts Cooper & Co on the North Shore said that agents were not looking at CVs as a basis of value last week – and nothing had changed this week. They use the most recent sales, among other tools, for their appraisal, looking at comparable properties.
“You need an agent to get a good appraisal of value, not an algorithm,” he said.
Out of nearly 20 properties that sold at the company’s auctions this week, just one sold for less than CV – a three-bedroom brick cedar house on a 500 sqm cross lease site on Balmain Road, Birkenhead that sold for $1.6m, $290,000 less than its new CV.
Another three properties sold for within $20,000 or $30,000 of their new CV, while the rest sold for more – sometimes well more – than that.
A four-bedroom home with a legal two-bedroom cottage on flat 6936 sqm site on Old Railway Road in Kumeu, fetched $2.77m – more than $1m over its new CV. That calculation allowed a land value of just $1.1m and improvements of $625,000 - a fraction of the actual value of the fully renovated house, landscaped grounds with pool, sheds and two double garages.
"CVs are a tax rating system. They’re just a way of casting another tax on people, that’s all they are,” said Cooper.
