Just seven months after new valuations were set for Hamilton homes, some are already fetching up to $205,000 above those figures.
Hamilton City Council revealed an average increase of 21.4 per cent on capital valuations in November last year, compared with the last time they were set, in 2012.
CVs rose by up to an average 32.5 per cent in Flagstaff, Harrowfield, Huntington and Rototuna. Since then, homes in the city's northeast, which includes newer properties and the sought-after Rototuna Junior High School, which opened this year, have increased significantly in value - some by up to 30 per cent.
That area is followed by traditionally cheaper areas such as Nawton and Dinsdale, which attract first-home buyers and investors.
A property with a four-bedroom home and two-bedroom apartment attached on a 675sq m section in Rototuna's Aquila Crescent had a CV of $690,000, but sold for $895,000 - $205,000 more than the rateable value.
A four-bedroom home on a 600sq m section on Alconbury Drive in Rototuna North had a CV of $560,000, but sold last month for $715,000 - a difference of $155,000.
Last week the council said that most Hamilton ratepayers would face a rates increase this year, with 30 per cent set to receive notifications of increases greater than 10 per cent. The change, which will come into effect on July 1, was attributed to the revaluations.
Quotable Value national spokeswoman Andrea Rush said it was no wonder CVs were now between $50,000 and $100,000 lower than the current market value given the rapid growth seen in Hamilton in the months since the rating revaluation was carried out.
Ms Rush said new measures introduced by the Reserve Bank aimed at curbing investor activity in Auckland had encouraged investors to look to Hamilton for rental properties, which had increased competition.
Lodge Real Estate managing director Jeremy O'Rourke said in areas such as Rototuna, Flagstaff and Huntington the sale price was hundreds of thousands of dollars above the CV.
"There doesn't appear to be a correlation between CVs and sales prices and this is certainly evident in these sales figures."
Harcourts central Hamilton branch manager Campbell Scott said, overall, most houses were selling above the CV, but the gap was exaggerated in the northeast where the demand was far greater than the supply. He urged people not to take too much notice of CVs.
"CVs came out last year and because the market was moving so quickly I don't even know really if on average they did catch up. Some, right from the get-go, were behind the ball." Lugton's managing director, Simon Lugton, said the gap would only get wider because of the shortage of houses for sale.
Gaps of $100,000 between CV were more likely in mid-priced houses, while there were smaller gaps in entry-level homes, he said.
Real Estate Institute figures for March show the median house sale price in Hamilton rose 34 per cent to $472,000 from $350,000 year on year.
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