REINZ rejects call to eliminate CVs

Tuesday 28 May 2013

Property commentator Alistair Helm has called for an end to CVs on residential property.

By Susan Edmunds

He said buyers and sellers tended to think of it as the “official” valuation of a property, when it was not a reliable guide.

“You look overseas and find that in most every other country there is no such number for an individual property. You will get the local council rates assessment, the local government tax, the capital value of the land or the rentable estimation for the property, but never an estimation of valuation.”

Helm said CVs were unreliable as they were usually computer-generated, assessed infrequently and had no bearing on market value.

“Having a CV for a property becomes a crutch for the real estate industry that does nothing to add value to their services. Imagine for a minute if there was no CV. A real estate agent would use skill and local knowledge to assess recent sales, ensuring that local knowledge could ensure that truly comparable properties were evaluated in order to come up with an intelligent estimation of the true market price.”

Removing CVs might encourage more properties to be listed with a price indication, he said.

But Real Estate Institute chief executive Helen O’Sullivan said while CVs could not be considered a foolproof guide to a property’s value, they would at least give a buyer a general idea.

“If people are looking at a property online, they can see whether the CV is $1 million or $500,000 and that will give them a sense of what sort of ballpark figure they are looking at.”

She said CVs should be treated as just one tool of many for buyers to work out a property’s value.

Comments from our readers

On 28 May 2013 at 4:35 pm Jeremy said:
I'm glad they wont be taking it away. Its obvious the CV plays no part in establishing the market value of a property however its definitely a good guide for purchasers. It comes in handy for me especially when you see a house that is listed as being 50 - 60% over CV whilst a recent sale for a house on the same street went for 20 - 30% over CV. I would approach the house with some caution as its most likely a speculator trying to do a quick flick. I would hate to have to rely on a real estate agent's local knowledge to assess a sale price. It gives them far too much leverage.
On 29 May 2013 at 11:50 am Alistair Helm said:
My objective in writing the article was to bring to attention how misleading they are and how the real estate industry should not rely on them (accurate or not) as an excuse not to provide a fair and informed professional view of what is the current market value of a house. Agents are not valuers but they present themselves as knowledgeable about the market so they should stand up and demonstrate this rather than hiding behind CV's - they are paid well enough to justify such expectation of skills.

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