Keep calm and carry on – that is the message for Auckland homeowners after many found out the new council valuations for their properties today.
The council valuations (CVs) for Auckland’s 630,000 homes have decreased by an average of 9%, alongside an average rates increase of 5.8%.
Property experts said the drop was unnerving and a tough pill to swallow for many – especially after the highs of 2021 – but that the CV was just a taxation tool and homeowners should not let it influence their decisions.
Auckland’s new property valuations released: Check your CV today
‘It is a worry’
Waiheke Island resident Amanda Wright said the value of her home had dropped $50,000 – down from $1,150,000 to $1,100,000 – about a 4.5% decrease.
“I don’t like that it’s gone down, but I thought it would have gone down more, so I’m happy that it’s not gone down that much,” she said.
“But it is a worry. There’s that underscore of worry that the valuation’s not going to come back up. It’s stressful, but I think it’s going to be OK.”
Others had seen a much sharper decline in their valuations, with the council delivering more muted figures after the last round in 2021 when the market was considered to be at a peak.
Homeowners and Buyers Association of NZ president John Gray said there was no reason to panic.
“People shouldn’t be disappointed that their ratings valuations have decreased because it is a taxation tool,” he said.
“It does not reflect the value of the property insofar as its amenity or condition.”
Gray said his own home had its CV lowered by a whopping $250,000. To him, that was good news.
“I’m very happy with that because that’s – as I said – a rating tool, so my rates should be less… Well, I mean, obviously Auckland Council is increasing the rates, but in terms of the CV being used as the primary factor in calculating the rates that I will pay, that is reduced,” he explained.
Long-term goals
Property Investors Federation spokesperson Matt Ball said he was not worried about the valuations for his two properties, and expected most investors and landlords to feel the same.
“It’s only really going to have an impact if you’re selling right now. If you are, like most property investors, a buy and hold investor, then you’ll be thinking long term,” he said.
“You’ll navigate probably several property cycles throughout your investment career, and this sort of thing really doesn’t concern you that much.”
But Wright said her valuation had given her pause.
“Before, perhaps, the pandemic we were feeling optimistic about our investment and our intention to renovate and possibly sell at some point,” she said.
“But now it feels, ‘oh gosh, have we overcapitalised’? You know, we’re a bit more nervous.”
Wright said she was reconsidering plans to renovate her home, but Gray said homeowners should not let their CV influence their decisions.
“It would be foolish to be relying on a council valuation to make any decisions about the value of a property, whether it be for the purposes of doing renovations or building a new home on the site,” he said.
“Because if you were going to get a mortgage, the banks would want a registered valuation from a qualified valuer.”
Ball said house prices were ultimately set by the market, and a council valuation could only have so much impact.
“I think with these CVs, it might set a bit of a price in a buyer’s mind. But really, if you’re selling your house, the price will still be what that buyer is willing to pay,” he said.
“So no, I don’t think this really is going to affect the market. The market is probably moving ahead of where the CVs are.”
rnz.co.nz
