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OPINION: For once, Auckland’s latest house capital valuations (CVs) should be viewed as what they are intended to be – a means of bringing a degree of equity to the rating system.
In the past, CVs have been a reasonable indicator of the market value of a property - but not the 2025 edition.
Some of the drawbacks with the latest valuations are:
- they were already 12 months out of date at the time of release
- the majority of the latest valuations are below those of 3-years previously, and it’s beyond most people’s recall when this last occurred
- the level of new builds entering the market in the past 2 years, particularly apartments in the $500,000 to $1 million price segment, are starting the put a small skew on average and median sales prices.
Why CVs were used as a proxy for valuations probably dates back to pre-internet days, combined with a tendency for the real estate profession and the media to focus on promoting the gap (most often positive) between selling price and CVs.
The inference being that if you sold above CV the housing market was robust and the vendor was doing well.
In reality, the real measure of what a home is worth is when it’s on the market, and vendor and buyer agree on a price.
Today, there are far better alternatives than using CVs for establishing a feel for a property’s sales value.
One of the more accurate ways is for a local agent to undertake an appraisal, where the specific features of a property, its uniqueness and appeal, can be put into context with sales prices being achieved for like properties in the same locality.
Even then, if two or more people are interested in a property, or when there is little appeal, this type of valuation can be off.
For those who are simply curious about the potential market value of their property rather than actually selling, they are better to use the free web sites that provide valuation services. Some websites give a specific value, others a range.
At the very minimum, comparing the online valuation to your CV is likely to give food for thought.
In releasing the latest Auckland CVs, the Council stated that the average decline in CV values across Auckland was 9% below where they were at in 2021.
Our sales records show the fall in the median sales price in May 2025 ($929,000) compared with that in 2021 ($1,072,000) was a little higher – a decline of 13.5%.
Putting aside current sales values, the market at present is turning over nicely.
May’s median sales price was in line with that for April, and the improvement in the number of sales being made, which I have been reporting all year, continued.
This year we had sold 4512 properties – 18% more than in the same period last year, 61% higher than in 2023 and 10 % higher than in 2022.
The fact that the housing market is more active with more homes are being sold is a point most commentators are either unaware of or are choosing to ignore. Rather, they choose to focus on price movements and the number of homes for sale.
There are more homes up for sale because of the large number of new apartments and townhouses being completed and reaching the market adding stock to the normal recycling of existing houses.
Many of the new homes for sale are priced around $750,000.
Last year, the number of homes we sold in the under $750,000 price segment as a percentage of all sales was 20%, This year it is running at 26%.
This trend is having a modest impact on average and median house sales price reported monthly.
While there may be little to no movement is average and median sales prices, when looked at from the perspective of properties being sold, the Auckland housing market is humming.
Peter Thompson, Managing Director, Barfoot & Thompson