House prices - for those thinking of relocating to New Zealand

Forums › Home Workshop DIY › House prices - for those thinking of relocating to New Zealand

kingdragonfly

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#214313 6-May-2017 08:07

https://www.qv.co.nz/property-trends/residential-house-values

A word of advice for those thinking of moving inside New Zealand, or maybe from abroad: prepare for "sticker shock"

"Quotable Value" webpage summarizes how much a house is various areas, and yearly change in value.

"Updated monthly, this gives you the average property values in a given area. It allows you to compare two different months for the same area, giving the percentage change in value during that time."

You can Google something like "How many USD is 1000000 NZD?" to get a quick currency conversion

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#1776799 6-May-2017 10:39

My clients from overseas are usually more surprised by the poor value for money rather than the price per se.

mattwnz

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#1776847 6-May-2017 13:15

Apparently prices are beginning to drop in Auckland, and there aren't as many overseas buyers in the auction rooms. High house prices are bad in many ways. IMO. The whole thing is fuelled by greed, and lack of government planning, in building enough to meet immigration inflow. Only now at election time are they starting to acknowledge the problem.

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#1776860 6-May-2017 14:06

mattwnz: Apparently prices are beginning to drop in Auckland, and there aren't as many overseas buyers in the auction rooms. High house prices are bad in many ways. IMO. The whole thing is fuelled by greed, and lack of government planning, in building enough to meet immigration inflow. Only now at election time are they starting to acknowledge the problem.

It's probably because the overseas buyers have discovered towns and cities other than Auckland. Many places have magically appreciated by 30-50% in the last 12-24 months.

I presume you mean overseas as people living overseas regardless of residency status. You can have locally living non residents and overseas residents and overseas non residents and local residents.

invisibleman18

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#1776868 6-May-2017 15:09

It's extremely difficult. Just going through this now as a first time buyer having been given notice to move from the rental we've been in for 5 years as landlord has decided to sell. Seems too much hassle to go through moving just to rent again and end up having to do all this again before long when they decide to sell, so trying to see if we can make use of Kiwisaver, HomeStart Grant and savings to do it. Our current place sold 2 years ago with us as tenants and new person retained us, but this time wants to sell it vacant. Last time it sold for $350K (Johnsonville, Wellington) and this time is going to be $500K with the only improvements/additions being a new basic Warehouse oven to replace the ancient previous one and an extractor fan in the bathroom. It's all a bit nuts.

Would love to remain around Johnsonville but sadly it's out of reach. We're looking in Upper Hutt which seems just about doable at the moment, but without the luxury of a lot of time to look and needing to find somewhere to move into soon I think we're going to end up having to rent again. We did make an offer on something last week, but ended up pulling out after we couldn't reach agreement on conditions, and think it was over-priced for the area anyway. The worry is paying high rent for another year and prices continuing to sky rocket will mean it's never going to be a possibility.

driller2000

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#1776870 6-May-2017 15:23

This website is a good free resource/starting point to get an indicative cost for homes across the country - certainly more accurate than CV's - and cheaper than QV, or getting an RV from a Valuer. :

https://homes.co.nz/

Disrespective

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#1777004 6-May-2017 22:28

driller2000:

This website is a good free resource/starting point to get an indicative cost for homes across the country - certainly more accurate than CV's - and cheaper than QV, or getting an RV from a Valuer. :

https://homes.co.nz/

A word of caution here. My parents recently sold their house in Tauranga and it was sold for $100k less than the estimation on homes.co.nz. The price they did get was very fair and we all felt aiming for the homes value was foolhardy.

An estimate is just that, and don't assume it means anything more ;)

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nickb800

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#1777028 7-May-2017 08:27

Disrespective:

driller2000:

This website is a good free resource/starting point to get an indicative cost for homes across the country - certainly more accurate than CV's - and cheaper than QV, or getting an RV from a Valuer. :

https://homes.co.nz/

A word of caution here. My parents recently sold their house in Tauranga and it was sold for $100k less than the estimation on homes.co.nz. The price they did get was very fair and we all felt aiming for the homes value was foolhardy.

An estimate is just that, and don't assume it means anything more ;)

Consider homes.co.nz equivalent to an E-valuer from QV (the $50 option), as are both essentially an algorithm running off public data. Or, a more up-to-date version of a council/rateable valuation. All three face the same issue of missing any special characteristics that aren't on the public file e.g. unconsented renovations, swimming pools, interior condition, and so on

A registered valuation is a different kettle of fish involving a physical visit by a valuer and hundreds of dollars, and you would expect it to be far more accurate.

Basically, homes.co.nz is awesome, but don't get too carried away with it when bidding or placing an offer

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#1777034 7-May-2017 08:47

driller2000:
This website is a good free resource/starting point to get an indicative cost for homes across the country - certainly more accurate than CV's - and cheaper than QV, or getting an RV from a Valuer. :

https://homes.co.nz/

It's out by £1m on our house and has no values at all for the nearest 3...!

Perhaps it works better in urban areas?

driller2000

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#1777042 7-May-2017 09:03

nickb800:

Disrespective:

driller2000:

This website is a good free resource/starting point to get an indicative cost for homes across the country - certainly more accurate than CV's - and cheaper than QV, or getting an RV from a Valuer. :

https://homes.co.nz/

A word of caution here. My parents recently sold their house in Tauranga and it was sold for $100k less than the estimation on homes.co.nz. The price they did get was very fair and we all felt aiming for the homes value was foolhardy.

An estimate is just that, and don't assume it means anything more ;)

Consider homes.co.nz equivalent to an E-valuer from QV (the $50 option), as are both essentially an algorithm running off public data. Or, a more up-to-date version of a council/rateable valuation. All three face the same issue of missing any special characteristics that aren't on the public file e.g. unconsented renovations, swimming pools, interior condition, and so on

A registered valuation is a different kettle of fish involving a physical visit by a valuer and hundreds of dollars, and you would expect it to be far more accurate.

Basically, homes.co.nz is awesome, but don't get too carried away with it when bidding or placing an offer

Yep totally agree - but it beats paying $50 for something that is available for free.

Is also a good way to see what other properties have actually sold for in the vicinity as well.

If I was seriously thinking of purchasing than I would get an RV as I have in the past - both for build purposes for the bank - but also for refinancing, given it is based an a site specific inspection by a professionally qualified valuer - with a detailed valuation report as a deliverable.

PS: Yep have had friends who have paid 20% more than the homes.co.nz estimate for a home in Akl in Feb 2017 - but this was slightly less than the RV they got to assist their purchase decision. So yep homes.co.nz is only a starter - but the sale price will ultimately be determined by the specifics of the property and the market conditions/buyer interest at the time - and of course what the seller is willing to accept.

Technofreak

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#1777053 7-May-2017 09:57

nickb800:

........

A registered valuation is a different kettle of fish involving a physical visit by a valuer and hundreds of dollars, and you would expect it to be far more accurate.........

Not in my experience.

A house I was selling had three valuations in very short period of time all done by the same valuer. One was for a prospective purchaser to be used as the basis for making an offer, the other two for the eventual purchaser which were used for satisfying their banks lending requirements. All valuations were arranged by the parties wanting them, I had no involvement what so ever with the valuations.

The first valuation for the offer was so far below market value it was an insult.

The second valuation while significantly higher than the other valuation was also below market value, such that the purchaser wasn't going to be able to borrow the money. The Real Estate agent was so disgusted she was prepared to pay for another valuation. The purchaser went back to the valuer who did another valuation that reflected the property value and the deal was done. Their excuse was the didn't have the latest CV or QV figures when they did the other valuation. Talk about professional negligence, they should know what the market is doing without the need to have QV or CV figures.

The valuations varied by over 30% from the first to the third (last) valuation.

I think valuations figures can very much reflect what the requesting person wants them to be and don't necessarily truly reflect the actual value. I know when I've had valuations done I get asked what purpose I want them for.

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#1777057 7-May-2017 10:03

Technofreak:

nickb800:

........

A registered valuation is a different kettle of fish involving a physical visit by a valuer and hundreds of dollars, and you would expect it to be far more accurate.........

Not in my experience.

A house I was selling had three valuations in very short period of time all done by the same valuer. One was for a prospective purchaser to be used as the basis for making an offer, the other two for the eventual purchaser which were used for satisfying their banks lending requirements. All valuations were arranged by the parties wanting them, I had no involvement what so ever with the valuations.

The first valuation for the offer was so far below market value it was an insult.

The second valuation while significantly higher than the other valuation was also below market value, such that the purchaser wasn't going to be able to borrow the money. The Real Estate agent was so disgusted she was prepared to pay for another valuation. The purchaser went back to the valuer who did another valuation that reflected the property value and the deal was done. Their excuse was the didn't have the latest CV or QV figures when they did the other valuation. Talk about professional negligence, they should know what the market is doing without the need to have QV or CV figures.

The valuations varied by over 30% from the first to the third (last) valuation.

I think valuations figures can very much reflect what the requesting person wants them to be and don't necessarily truly reflect the actual value. I know when I've had valuations done I get asked what purpose I want them for.

The Royal Institution of Chartered Surveyors has a widely accepted definition of Market Value from the Red Book (the manual which sets out the rules for undertaking valuations in the UK)

"The definition of "market value" has become institutionalised by the International Valuation Standards Council ("IVSC") and the Royal Institution of Chartered Surveyors ("RICS"). To the IVSC,“market value” means “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. "The market value shall be documented in a transparent and clear manner". The IVSC make it clear that a “willing seller” in that context is simply a seller motivated to sell at the best price obtainable on the valuation date.

In the Red Book, the RICS manual for valuers, the open market value ("OMV") is the best price obtainable in a transaction completed on the valuation date based upon the following assumptions:

(i) a willing seller (a hypothetical owner who is neither eager nor reluctant i.e. not forced but not at a price which suits only him/her).
(ii) prior to the valuation, a reasonable period to market the property and complete all the necessary legal formalities was available.
(iii) during this period, the state of the market was the same as at the date of valuation.
(iv) any bid from a special purchaser is excluded.(vi) all parties acted knowledgeably, prudently and without compulsion"

I agree that valuations normally reflect the instructions to some extent (and I was formerly a Chartered Surveyor) which is why I find it odd when banks in NZ are happy to accept valuations where they were not the instructing party. A valuer in the UK would specifically exclude liability to any third party arising from reliance on the valuation. That is why UK banks always insist on a full valuation by a valuer they instructed before they will lend a single penny against a property.

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mattwnz

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#1777151 7-May-2017 13:57

I had an REgistered valuation done by a pro 2 years ago on a house, where they spent a couple of hours. Cost nearly a grand. I thought the value sounded low. It ended up selling for about double, and it had quite a few tenders that were near that double price band. Biggest waste of money I had spent and won't ever use one again. And this was before the price explosion in the Wellington region.

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#1777152 7-May-2017 14:06

In general, a particular house's price is determined by the buyer with the biggest wallet, at that very point in time. So unless one has a crystal ball, there is no way to accurately determine a house's price without knowing anything about the interested buyers.

mattwnz

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#1777239 7-May-2017 17:43

joker97:

In general, a particular house's price is determined by the buyer with the biggest wallet, at that very point in time. So unless one has a crystal ball, there is no way to accurately determine a house's price without knowing anything about the interested buyers.

Except you expect registered valuer to get it reasonably correct, as it is supposed to reflect the current market value. So if those buyers with the big wallets exist in the market at the time, the valuers should be taking that into consideration, as they are supposed to be using up to the minute information. Otherwise people are best to just stick with their automated valuing systems.

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#1777259 7-May-2017 18:00

mattwnz:

joker97:

In general, a particular house's price is determined by the buyer with the biggest wallet, at that very point in time. So unless one has a crystal ball, there is no way to accurately determine a house's price without knowing anything about the interested buyers.

Except you expect registered valuer to get it reasonably correct, as it is supposed to reflect the current market value. So if those buyers with the big wallets exist in the market at the time, the valuers should be taking that into consideration, as they are supposed to be using up to the minute information. Otherwise people are best to just stick with their automated valuing systems.

It's not really the buyers in the market at the time, but specifically who is wanting to buy that particular house. Obviously there will be billionaires in the market as well as single mothers etc, but they may not be after your house, even if 99 of them showed up to your open home.