Valuations Versus Actual July Sales

Barfoot & Thompson data shows new Auckland Council valuations are largely in line with the expected price brackets when compared to actual July property sales

Auckland property owners wondering how their new Council valuations stack up in real terms can take reassurance from new findings by real estate company Barfoot & Thompson.

The company compared the sale price for properties it sold in July 2017 to the new ratable value for the same properties, and found the majority of properties sold at a price within 10% of their recently released ratable value.

“Our data indicates the new ratable values are generally reflective of the price ranges that properties were being sold for in July this year,” says Barfoot & Thompson Managing Director Peter Thompson.

The information shows that nearly 80% of the properties reviewed sold for a price within 10% of the property’s new ratable value, and more than half (54%) sold for a price within 5%.

Of the 669 sales reviewed, 53 properties, or 8%, had a July 2017 sale price that matched their new ratable value.

“While the rule still stands that Council’s ratable valuations should not be relied on as a market value for a property, we can say that the system is generally in step with the value brackets most homes would naturally fall into, had they been sold at that time.”

He says a discrepancy of up to around 10%, while representing tens of thousands of dollars difference for many homes, could be expected when comparing actual values to the findings of a mass valuation exercise such as those used by councils.

“These appraisals are for determining the share of rates a property owner pays, so won’t take into account the real value-adds or detractors of an individual property.”

He says properties that sold for substantially more or less than their July ratable value are likely examples of factors that simply cannot be accounted for in mass appraisal exercises, or they may be an extremely unique property that may need closer review.

“Aspects like a property’s location, condition, how much sun it gets, special or unique features, the chattels included, and so on, would all have a bearing on its true market value.

“That’s why if you are making a property decision we absolutely recommend requesting a professional appraisal from a real estate salesperson or investing in a registered valuation.”

How the numbers stack up:

• Barfoot & Thompson’s review included 669 properties sold during July 2017 (residential properties, excluding only a handful of properties where the address details held were not easily matched)

• 8% of properties sold for the same price as their July 2017 rateable value

• 79% of properties sold for a price within 10%

• 54% of properties sold for a price within 5%

• 39% of properties sold above their July 2017 rateable value (by more than 1%)

• 14% of properties sold below, by more than 10%

ENDS

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