Inconsistent price estimates: Auckland Council explains why CVs have been delayed

Delays in the release of new Auckland Council valuations are because data teams generated inconsistent price estimates across the city.

The council had been due to release new valuation estimates for every property in Auckland but last week announced the CVs will instead be released next March.

The new CVs – formally known as capital values – were initially expected last year.

However, the council pushed that date back to October, before delaying a second time and saying the CVs would instead be out this month.

The move to now release them next year was the third delay.

The council said “inconsistencies” in the data were discovered during an audit.

These include inconsistencies across land values, “rear site properties”, cross-lease values and “issues with relativities between different Unitary Plan zonings”.

Council valuations manager Chloe Woollard said it is not unusual during the audit process for council teams to be asked to improve certain parts of the CV data.

“The audit is in place for this exact reason, to ensure that, upon release, Aucklanders can have confidence in the values,” Woollard said.

Councils have to issue new valuations to property owners about every three years under New Zealand law because CVs are used to help work out how much rates each property owner must pay.

The process is overseen by the Office of the Valuer General.

Wellington home owners received their new citywide valuations last week without the council experiencing any Covid-19-related delays.

However, Woollard said the Covid-19 pandemic had been a major cause of delays in Auckland, adding the revaluation had been “incredibly complex” because of the nature of the city’s property market.

The Office of the Valuer General granted Auckland Council a one-year deferral after the council argued that trying to estimate home values in the uncertain market created by arrival of the pandemic would likely produce distorted results that might be unfair to home owners.

The Valuer-General allowed another delay so the audit could be done at the council’s offices, and the audit attracted an amber light under the Valuer-General’s audit system,” Woollard said.

“It is not unusual for councils to receive requests from the OVG to improve certain aspects of the revaluation before release.

“The amber light essentially means further work is required before the revaluation can be signed off and values used for rating purposes.”

She said her team was working on “rectifying these issues”.

Once the CVs are finalised, they will be used to determine every property owner’s rates for the 2022/2023 rating year, with the rates bills kicking in from July 1, 2022.

When they are finally released, home owners can expect their new CVs to be much higher than in 2017.

The city’s average property value in 2017 was just over $1m, but has now jumped to $1.5m, according to analysts Valocity.

The booming growth in the past two years has meant it’s become common for homes to sell for hundreds of thousands of dollars – if not millions – above their CVs.

A Sandringham home on Hazelmere Rd is among the latest homes to fetch a stunning price as it sold for $3.56m at auction late last month.

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