Valuation Rodney Ltd

Remove Doubt - Create Certainty on your Next Property Decision

Latest Property News - March/April 2021

Auckland Market

It's now been more than 12 months since the COVID-19 lockdowns began in New Zealand, which started a period of great uncertainty without precedence that had economists and property professionals struggling to come to terms with what may happen to property values. Most, if not all, predicted falls of varying degrees but after the Level 4 lockdown was lifted what transpired confounded them all.

This is all history now of course with most markets recording strong gains in median sales prices - Auckland up 19%, NZ up 22% (Feb 2021 v Feb 2020) as fear of missing out, low interest rates, and active first home buyers and investors fuelled a perfect storm of what has been historically low inventory levels since the highs of 2008-2011 - Auckland: 44 weeks in Nov 2010, 18 weeks Nov 2019, 19 weeks Feb 2020, 8 weeks Dec 2020 (source:realestate.co.nz)

As the fear of Covid recedes people look to the future. What is certain with the economic fallout is a continuation of low interest rates. Political embarrassment over the high cost of housing for first home buyers has pushed the Government into action, mostly targeting the removal of investors in the market by extending the bright-line test to 10 years, removing of interest tax deductions, and potentially decreasing the Loan to Value Ratio to come. This will result in increased rental costs, already up 22% since 2017 is predicted to rise a further 30% in the next four years (source: Tony Alexander) and may push highly leveraged/negatively geared investors to the edge due to higher tax payments from the lack of deductability.

Part of the Government package announced in March 2021 includes a $3.8 billion investment into increasing supply of housing stock. This includes a fund for infrastructure projects with the aim to speed up delivery of large-scale projects of public, affordable and mixed housing, and for local councils to open up land and enable housing intensification. This will not happen overnight, and the shadow of the current Government's performance in delivering on housing does not inspire confidence amongst property professionals that this package will significantly impact supply for the next few years. Added to this a shortage of tradespeople, supplies of building materials and still lengthy Resource Management Act and Council planning delays; the outlook is not positive.

Once borders open up with Australia, the lure of the building boom there with higher wages and lower housing costs out of the CBD's also pose a risk to New Zealand loosing skilled labour to our neighbours, compounding the problems the building industry already face.

The next six to twelve months will be critical; as borders begin to open and inward migration flows return, housing supply could continue to worsen, putting additional pressure on prices. This could be offset by the expected return of LVR's on probably investors or possibly across the board, together with the forecasted worsening economic conditions as Government fiscal stimulus ends may see some easing following the traditional historical cycles. But, to quote economist Tony Alexander, "History tells us that predicting house price movements is a mugs game". One thing is certain, unless fundamental structural changes are made, housing supply is likely to remain a concern for many years to come.

Rodney Commentary

In the Rodney District activity remains strong, particularly in new subdivisions in and around Silverdale (Milldale & Millwater), out west in Kumeu, Huapai, Waimauku and Helensville, and north around Warkworth. Roading and services infrastructure investment will be key to ensuring these areas can develop further as an alternative to the in-fil housing in suburbs closer to the CBD. Attracting businesses away from the CBD into business hubs north of Albany, west of Westgate and around Silverdale will create more employment opportunities locally for those wanting to avoid the commute into the Auckland CBD.

North Shore Commentary

In the North Shore area focus will be on the investor market following the recent government changes where popular rental suburbs like Glenfield, Hillcrest, Birkdale, Beach Haven and East Coast Bays could see opportunities for first home buyers and developers as investors cash-out. Intensification remains popular as larger sites with single dwellings are converted to multi-townhouse developments however increased costs from land values, development levies, fees and building costs make the delivery affordable housing difficult.

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Property Institute Quality Assurance
Accredited Firm in Real Property Valuation

PINZ Quality Accredited Firm for Real Property ValuationIn December 2013, Valuation Rodney Ltd along with other branches of Property INDEPTH were proud to receive the Property Institute Quality Assurance accreditation in Real Property Valuation.

Being accredited with the Property Institute means that we operate policies and processes to support our compliance with the legal, regulatory and professional standards in the property profession, ensuring that our customers receive a high quality service by properly qualified professionals.

Our policies and processes are monitored and audited by the Property Institute for ongoing compliance with the required standards set out by the Property Institute and International Valuation Standards Council.

We are totally committed behind this cause, to ensure you, our customers, can be assured of receiving the best service possible.

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A comment about the Auckland Rating Valuations

Auckland Council Rating ValuesAuckland's last Rating Valuation was establised late 2017 (with the effective date being 1st July 2017) and was due to be updated in 2020 being the usual three-year review cycle. With the disruption caused by COVID-19, this process has been postponed for one year and should be completed later in 2021.

It's important to remember that the Rating Valuation, whilst supposed to resemble a market value as at 1 July 2017, is not a reflection of the true market valuation as at today.

These rating valuations are not an individual assessment of each property - with over 500,000 properties in the greater Auckland area doing individual valuations on each is an impossibility. Instead, a mass appraisal approach is used, using statistical methods as approved by the Valuer General, to assess a value for apportioning rates and levies as determined by the Auckland Council.

Unfortunately, New Zealander's have a tradition of relating the market value to the rating value (or CV as it used to be known) when in most cases there is little correlation. Take a look at some of the differences between sales prices and the RV's to see just how wildly they can differ.

Again this is because each individual property is not assessed for it's own particular benefits, features, quality and condition, or may even be based on inaccurate council records regarding dwelling size, renovations and/or other improvements. Movements in sales value in an area or suburb are also mass applied to other properties in the same locality that in reality may not share in the same gain or loss in value, and now that the current RV is nearing four years old, the disparity is even greater.

So putting this in context, Rating Valuations are for rating purposes only - with the only risk being one householder may be paying more or less than their fair share of rates.

A market valuation by a Registered Valuer will provide more certainty when determining a market value for selling, purchasing or financing purposes.

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What Makes our Valuations Different!

Using our Web Based TechnologyThis is a question often put to us by many people - customers, banks, mortgage brokers, investors. Quite a valid question too, especially given the number of different valuation companies in the market.

Valuation Rodney Ltd is part of the Property Indepth group, a nationwide franchise organisation with other franchise holders operating in other regions throughout New Zealand. The Property Indepth group is arguably one of the largest specialist residential and lifestyle valuation companies in New Zealand, and we are still growing! We can therefore offer our customers both the advantage of local expertise from our valuing team as well as a one point of contact if your property portfolio is widespread.

Our valuation reports are accepted by all financial institutions - including the second tier lenders, and on the preferred list of many of the country's leading financial institutions. Some of our competitors are not. It also pays to check with your bank or broker, as often many lending institutions prefer to allocate valuation work through their panels using the Valocity or Corelogic platforms. If OK to deal direct with us, we'd be happy to help.

We pride ourselves on our service. Employing the latest web-based technology and access to a variety of property databases enables us to complete many reports within hours not days of the inspection. Our reports are sent electronically via email, including copies to your bank and/or broker as required.

When it comes to quality, our Valuation Reports are hard to beat. Our valuations include:

  • A Registered Value of the property
  • Detailed Market Commentary
  • Room by room detail of fixtures, fittings and chattels
  • Risk Analysis of the property and the market
  • Plain English explanations and definitions for each section so you can understand the technical talk
  • Plenty of photos, both inside and outside
  • Suggested ways to improve the property where appropriate

We're backed by a New Zealand based call centre (free phone number) and you can speak with the valuers directly if you have any specific requirements.

You'll also find us competitively priced and when you consider all the benefits above, our reports represent fantastic value.

So if you've not yet used us, why not give us a go for your next valuation report? Come join the revolution in valuations and get smart when buying or selling your property!

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Property InDepth
Winners of the Property Institute of New Zealand Innovation of the Year Award 2008