Warnings against spending spree based on CVs

The Property Institute is warning against spending sprees based on new council CV estimates

Warnings against spending spree based on CVs
Property Institute of New Zealand has endorsed a warning that Aucklanders should not go out and binge on the basis of big increases in the council-assessed value of their homes.

New Housing Minister Phil Twyford also warned that it would be unwise for Auckland homeowners to assume they’ve hit the jackpot based on the large increases in values likely to reflect in the council valuations that were made available last week.

Property Institute chief executive Ashley Church agreed that Aucklanders shouldn’t read too much into the council figures and repeated his recent reminder that they are a “guesstimate,” rather than an accurate indicator of what a home is actually worth.

Church said there is a common misunderstanding about what valuations are and how much weight should be placed on them.

“CVs are conducted once every 3 years and they’re a ‘snapshot’ of the approximate value of any given property at that moment in time,” Church said. “They shouldn’t be regarded as an exact measure of the value of a home – and they’re certainly not intended to provide an ongoing price guide.”

The methodology for a council valuation is very different to a formal valuation, he said. “A CV is a blunt instrument.”

Church said it “would be a mistake” if some people might see the council valuation of their homes as a measure of wealth and be tempted to go out and spend on that basis.

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