Kirsty Wynn

Kirsty Wynn is a senior reporter at the Herald on Sunday.

Sellers score massive gains

Hot Auckland homes are selling well above their official valuations, making it hard to accurately price properties

Rangitoto Ave in Remuera sold for $1.175m above valuation. Photo / Neville Marriner
Rangitoto Ave in Remuera sold for $1.175m above valuation. Photo / Neville Marriner

It's almost as good as claiming Lotto's first-division prize - the winners in Auckland's frantic housing market are selling their properties for hundreds of thousands of dollars above their official valuations.

Statistics show that in the past six months there have been at least nine properties that sold for $500,000 or more above their CV, and one went for a whopping $1.2 million above valuation.

Most of the properties to shatter their valuations are family homes in top school zones or close to the city, according to the figures obtained from Quotable Value.

The housing boom is also making it difficult for independent valuers to put an accurate price on properties.

An example of the gains being made is a 1960s brick and tile home on Auckland's North Shore.

The Mairangi Bay property at 8 Penzance Rd was revalued by the council last year at $880,000 but sold at auction in May this year for $1.5 million - a staggering 70 per cent more than its CV.

New owners Sally and Jason Galea bought the property with their two young children in mind, and have no plans to subdivide the sprawling 1140sq m piece of land.

"We have already had two people knock on our door and ask if we are willing to sell a portion, but we said no. This size property is the last of its kind around here, and we wanted somewhere for the kids to run around."

Galea thought the CV of $880,000 was low, and said the family had extended themselves to buy the property but were happy with their new home. Their previous home, just 200m up the road, had also sold well above CV.

The Penzance Rd home was close to the beach, cafes and good schools, so interest was high and had pushed the price up, said real estate agent Deb McCool.

Other properties in the area had sold for between $120,000-$200,000 over CV but Penzance Rd stood out.

"Properties like this are few and far between, and there were around 200 people at the auction and bidding was strong," McCool said.

Putting an accurate price on any property was a real problem at the moment because there were more buyers than sellers, McCool said.

She recently sold a house at auction for $749,000 that the vendor was about to accept $680,000 for.

She said council valuations were meaningless and that even registered valuers were struggling to find accurate prices at the moment.

Another stand-out property was 18 Rangitoto Ave in Remuera, which sold for $2,895,000 in August - $1,175,000 over its recent CV of $1,720,000.

Bayleys Remuera agent David Rainbow, who marketed and sold the property, said buyer competition was fierce.

"Two hundred parties registered from open-home viewings and at auction. Five parties were competitively bidding against each other, which ensured the top price was achieved," Rainbow said.

He said the CV could be a ballpark figure but a lack of stock and high demand meant the price was pushed up by bidders who all desperately wanted the home.

The house had undergone significant internal renovations and remodelling work that were not factored into the $1,720,000 council valuation.

"A council valuation is a broad snapshot of a suburb, and fails to take into account added-value work that owners have invested in," Rainbow said.

"This was certainly the case for 18 Rangitoto Ave, where a substantial sum had been spent including the kitchen and outdoor entertaining area."

- Herald on Sunday

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