New CVs prompt questions on rates and value
Auckland’s latest Council Valuations (CVs) are out – prompting questions from clients about how these affect their property value, LVR, and home loan rates.
Here’s what you need to know to guide them.
CVs aren’t market value – but they still matter
Auckland Council has released updated CVs for 630,000 properties, based on sales data from May 2024. That means they’re already more than a year out of date – and not a direct indicator of current market value.
“Council CVs aren’t the same as market value. They’re used to calculate your rates and are based on sales data from May 2024 – so they’re already a year ‘out of date’,” said Emily Mendes Ribeiro (pictured left), ANZ NZ’s head of homeowners.
CVs can still influence a property’s estimated value, particularly when there’s been a significant change – such as renovations or reclassification. ANZ uses Valocity for property estimates, which factors in CVs alongside other data.
LVR shifts and the impact on rate eligibility
If a property’s estimated value changes significantly, it can affect the client’s loan-to-value ratio (LVR).
“If your property value goes down, your LVR goes up… If your value goes up, and as you pay down your home loan, your LVR goes down,” Mendes Ribeiro said.
This matters because ANZ’s special interest rates apply to lending at 80% LVR or lower. But even if a CV drop technically lifts a client’s LVR above 80%, they won’t automatically lose their special rate – unless there’s a new credit event like a top-up or restructure.
“Generally, unless you make a change to your loan… you’ll continue to be eligible for special rates,” Mendes Ribeiro said.
Conversely, if the LVR improves, brokers should flag potential eligibility for lower rates. ANZ reviews this monthly.
CVs vs market value: Set expectations early
Barfoot & Thompson’s GM of sales, Grant Sykes (pictured right), noted that CVs often spark “a lot of noise” – but little pricing impact.
“We don’t see them having a huge impact on the prices that are achieved. You still need a willing seller and a willing buyer to pay the money, or not,” Sykes said.
Instead, real-time data from comparable sales and local agents will always carry more weight.
“An auction is the best way to find out what a property is worth… It is the fair market value on the day,” Sykes said.
