REINZ has analysed the sales price to valuation ratio of residential properties by region over recent months and the results make for interesting reading.
That’s because it is the Gisborne region – rather than one of the main urban centres - where properties are selling for the most above their CVs.
In Gisborne properties are selling on average for 71% more than their current CVs, which is the highest in the country.
It is followed by Southland, where prices are around 43% higher than their current CV and Hawke’s Bay and Marlborough where properties are selling for around 27% more than their current CVs.
REINZ chief executive Bindi Norwell says that the Gisborne region has seen property purchasers paying the highest percentage over CV for the last 10 months in a row, since October 2019.
This shows how the shortage of listings in the Gisborne region has continued to impact the East Coast, she says.
“While CVs are not what a property is ‘worth’ they are one of a range of indicators that can help understand the value of a property.
“With demand for good properties exceeding supply, this is why we’re seeing such a premium being paid for properties in some parts of the country. “
Pent-up demand after the country came out of the first lockdown has contributed to the premium people are prepared to pay for properties – particularly if they have features like a great outdoor area, a pool, a study/office for working from home or even a large backyard, Norwell adds.
However, the situation in Auckland stands in contrast to that in Gisborne.
Despite recent headlines of an uplift in sales of Auckland’s multi-million-dollar mansions, at a regional level Auckland’s residential properties are currently selling at the closest to their CV.
Norwell says that Auckland buyers are, currently, paying on average 5% over the CV in Auckland which is the most “affordable” in the country.
That’s despite the fact that the current CVs are nearly three years old and were due to be updated at the end of this year, she says.
“Interestingly, Auckland has been the region where purchasers are paying the closest to the CV for the last 11 months, and for the prior nine months it was the only region in the country where properties were selling for below CV.”
Check out North Island CV/SP ratios here.
Check out South Island CV/SP rations here.
*The capital value (CV) is the value of a property for rating purposes. It is not the current market value of a property.
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