Should I Wait for New GV in November?

[kmor110]

Hi all!

Apologies if this has been covered, I did a search and couldn't find anything addressing the subject from this perspective.

I just read an article confirming new government valuations (carried out in July '14) will be applied from November '14 (article link below).

In your opinions, is this likely to have any impact on the sale price of entry level properties? I.e. is it worth waiting for this before putting our property on the market.

I understand that GV is not a true reflection of price, but our property is reasonably 'entry-level' and we feel it would appeal to first home buyers who generally know less about property values and have been known to use the GV as an indicator i.e. "Properties are about 100k above GV in this area so this one must be good value!"

We are getting a registered valuation soon anyway, as we have renovated the interior which I understand won't be reflected in the GV. But I am curious to hear what you people think!

FYI Our house is 2brm in Orewa, no significant improvements to exterior except paint and fencing since last GV.

http://www.interest.co.nz/property/71527/new-council-valuations-auckland-will-see-some-property-owners-facing-bigger-rates-inc

[ENP]

I'd wait primarily because warmer weather means more people wanting to buy houses. EESPECIALLY OREWA! Since it is a beachside suburb.

I see reasons why an increased GV would increase the sale price. I have no reason to think why it would decrease the price, so might be best waiting. It's only 3 months away.

[kmor110]

I'd wait primarily because warmer weather means more people wanting to buy houses. EESPECIALLY OREWA! Since it is a beachside suburb.

I see reasons why an increased GV would increase the sale price. I have no reason to think why it would decrease the price, so might be best waiting. It's only 3 months away.

Thanks for the reply ENP - your logic is excellent in that there may be reasons for the new GV to increase price, but it's doubtful it would affect price negatively.

[elguapo]

but it's doubtful it would affect price negatively.

I think there is a good chance it will. A bright shiny new GV on a property means punters will expect to pay that. More than that and they will feel it's over priced.

With an older GV it's far less of a reference point.

[ammar]

I think there is a good chance it will. A bright shiny new GV on a property means punters will expect to pay that. More than that and they will feel it's over priced.

With an older GV it's far less of a reference point.

What is about house prices dropping due to hike in interest rate ? A decline in prices is just dtarting according to intetedt.co.nz

[Aston]

I agree with ENP in terms of waiting for warmer weather etc.

However the "new government valuations" will mean diddly squat. It will not mean that people may pay more for your property on November 14 than they may have been prepared to pay on November 13. The market is not that naïve.

Go ahead with your registered valuation, this will be the best indicator as to the price a purchaser may be likely to pay for the property.

[Gladdynook]

I very much doubt the new CV will make any difference - as mentioned already, the current CVs are so far out that no one takes any notice of them anyway. Its been 12-15 years since they were useful. Even with the new valuations, I suspect these will still be 10-20% out from actual values.

More of a consideration is the state of the market. Has it turned already? I believe it has, and in 3 months a complete turnaround (downwards) could of occurred. I'd be selling now.

[kmor110]

What a range of responses! Thank you, I knew it would be a matter of opinion.

I don't know how to multi-quote so please excuse my poor attempt below

I think there is a good chance it will. A bright shiny new GV on a property means punters will expect to pay that. More than that and they will feel it's over priced.

With an older GV it's far less of a reference point.

Elguapo, fair point - it will come down to who get's an inflated GV and who gets and understated one then? Or is your general position that the GV will understate the value of houses in general either by being overly conservative or by the fact that once they are released in Nov they will already be several months out of date (or both, or other reasons!).

More of a consideration is the state of the market. Has it turned already? I believe it has, and in 3 months a complete turnaround (downwards) could of occurred. I'd be selling now.

Gladdynook - what makes you think the market has turned? I admit I am a novice who has been following the topic mainly through editorial and this is my understanding... People argue that high immigration, lack of new builds, high capital gains are drive the increases. Has this eased? We have summer coming up, are you saying you think the average prices this summer may be lower than now due to what? Extra seasonal supply via more people listing? Interested to hear your thoughts.

[elguapo]

Elguapo, fair point - it will come down to who get's an inflated GV and who gets and understated one then? Or is your general position that the GV will understate the value of houses in general either by being overly conservative or by the fact that once they are released in Nov they will already be several months out of date (or both, or other reasons!).

Personally, I don't think GV matters a damn, but quite a few people seem to think it means something. I'd be more focused around getting it on the market for the summer season.

[Aston]

Personally, I don't think GV matters a damn, but quite a few people seem to think it means something. I'd be more focused around getting it on the market for the summer season.

Totally agree.

CV means nothing at all. If you get an inflated CV, you will believe it because you want to. That doesn't mean that a buyer will pay a price, based on your over inflated CV.

The buyer will pay market price.

[stakeproperty]

Use the registered valuation as a selling tool as this will override any GV figure in the buyers mind, and although I agree the GV means nothing, buyers still seem to take it into consideration. But also keep in mind if you are not happy with the GV you have received, you can apply for an objection and use the registered valuation to get it changed. This is only beneficial if you are definitely selling as your rates will go up accordingly. There is about a four to six week window to apply.

[kmor110]

Use the registered valuation as a selling tool as this will override any GV figure in the buyers mind, and although I agree the GV means nothing, buyers still seem to take it into consideration. But also keep in mind if you are not happy with the GV you have received, you can apply for an objection and use the registered valuation to get it changed. This is only beneficial if you are definitely selling as your rates will go up accordingly. There is about a four to six week window to apply.

Thanks stakeproperty, for a concise answer that I found to be very useful in my particular situation.

[PTILoveYou]

I'm not going to wait around for new CV to come then buy.

With the immigration coming, you can't afford to wait.

[kmor110]

I'm not going to wait around for new CV to come then buy.

With the immigration coming, you can't afford to wait.

Only 72 people emigrated to Aussie in July apparently...yet immigration was highest since 2003. Crazy times!

[PTILoveYou]

Only 72 people emigrated to Aussie in July apparently...yet immigration was highest since 2003. Crazy times!

Yeah we are like in the middle of the cycle (ie above CV 50%), yet immigration is just starting to ramp up, crazy times indeed =)