Brought to you by the Valocity Research Team: Wayne Shum and James Wilson

Executive Summary

After ongoing delays caused by COVID-19 Lockdowns, the update of Capital Values will be released throughout late 2021 and early 2022.

The Valocity Research team delved into what impact this may have on the housing market given the significant housing market activity that has occurred between Revaluations.

How rating valuations are set

Rating Valuations are calculated by comparing recent sales in an area, with considerations made for:

  • Property type
  • Zoning
  • Size, age, condition and quality of the home and amenities
  • Location
  • School zones
  • Desirable outlook

The valuations are calculated using mass-appraisal methods – not all properties are physically inspected by valuers.

A rating valuation comprises of three parts;

  • Capital Value, which is the appraised fair market value excluding chattels
  • Land Value, which is the appraised fair market value of the unimproved land
  • Value of Improvements, which is the added value of improvements to the land at the time of valuation e.g., dwellings

These valuations are prepared by the Council’s Valuers, working with the councils Valuation Service Provider after which the Office of the Valuer-General audits these values. The values are set to the effective date of valuation, for Auckland this being 1st June 2021, and originally planned to be released in October 2021. The Delta Lockdown has delayed the audit reviews and the values are now scheduled to be released in December 2021. In a fast-moving market like the one we have experienced in the past year, the values may already be outdated by the time of the December release.

All Rating Valuations are set on a freehold basis and are exclusive of chattels. The Rating Valuation of a property is only one of the factors used to determine annual rates payable by households.

What is happening in the market?

In the four years leading up to the effective date of the 2021 Revaluation, the median sale price has risen 37%. However, since the last revaluation, the market only experienced modest growth between mid-2017 and early 2020 before the post-COVID boom. This introduces significant complexity to the revaluation process as it becomes difficult to determine at what stage to ‘set’ the market movement, based on a longer-term movement or a ‘surge’ post-COVID?

The Auckland property market experienced unprecedented growth of 23% leading up to the valuation date of 1st June 2021. It continued its trajectory, growing a further 7% since the effective valuation date, with the Valocity Average Value sitting at $1,471,000 in November for the city.

The price growth in this period was fuelled by:

  • Record low-interest rates in late 2020 and early 2021
  • Suspension of the LVR limits by RBNZ
  • COVID related construction delays and cost escalation, suppressing new home supply.
  • The Unitary Plan and the National Policy Statement on Urban Development had unlocked the development potential of many residential properties

What happened in previous General Revaluations

Auckland has had three citywide General Revaluations since the Super-City’s inception, in 2011, 2014 and 2017.  The Revaluations aimed to reflect Revaluation dates of 1st July in each case.

To analyse how aligned with the market these revaluations were when they were released, Valocity analysed the sales price to CV ratio in the months before and after the effective revaluation date.

We can see that the values set accurately reflected the market conditions as of the valuation date when measured by Net Sale Price to CV Ratio. We can however see that whilst the valuations released reflects the market as of July in each instance, by the time these values were released in November, the market had moved on. This was particularly evident in 2014, with July valuation estimates 14% behind the November value.

Graph 2: Buyer Composition – Auckland

First Home Buyers’ share of the new homes market appears to be bouncing back from July 2021, but it is too early to establish the cause of this recovery.

What are they buying?

All buyer groups preferred new standalone dwellings.

First Home Buyers accounted for 42.6% of all new homes purchased, followed by Investors.

First Home Buyers had the highest share of new townhouses in their buying mix, this was driven by the Auckland market where the Unitary Plan encourages townhouse developments. Townhouses also generally offer lower priced, entry level options in most markets. Whilst affordability is the key driver to buying decision in the main centres, interestingly first home buyers stayed away from apartments where the lending rules were generally different or required higher deposit levels.

Multi Homeowners, who were purchasing their first investment property, exhibited similar buyer behaviour to first home buyers, favouring standalone dwellings, units, and townhouses over apartments.

Investors who own three or more properties are more likely to diversify into apartments and townhouses.

Apartments Dwellings Flats / Townhouses Share of total
First Home Buyer 4.2% 28.4% 10.0% 42.6%
Investor 5.4% 13.9% 5.0% 24.2%
Mover 0.4% 13.3% 1.5% 15.2%
Multi Homeowner 1.7% 11.2% 2.5% 15.4%
Re Entry to Market 0.3% 1.8% 0.5% 2.6%

Table 2: Market Composition – New Zealand

As expected, First Home Buyers were generally purchasing smaller homes than Investors and Multi Homeowners. The trend is more evident for apartment buyers where it is smaller by 42% and 14% smaller dwelling.

Apartments Dwellings Flats / Townhouses
First Home Buyer 66 170 108
Investor 94 194 114
Mover 83 205 135
Multi Homeowner 95 198 115
Re Entry to Market 76 182 108

Table 3: Average Property Area (sqm)

How much are they paying?

Not unexpectedly, First Home Buyers getting onto the property ladder paid the less for their first home of all buyer groups. Interestingly, those who exited and re enter the market were purchasing similar properties to First Home Buyers.

Movers who were generally seeking larger homes to cater to growing families paid the most.

Apartments Dwellings Flats / Townhouses
First Home Buyer $649,000 $730,000 $670,000
Investor $729,000 $785,000 $680,000
Mover $800,000 $879,750 $845,000
Multi Homeowner $715,000 $827,000 $720,000
Re Entry to Market $670,000 $730,000 $722,913

Table 4 – Median Purchase Price


Analysis of mortgage data reveals Investors’ share of first home purchases increased the most since the latter half of 2020 at the expense of First Home Buyers. This was largely driven by the increased equity, and lower LVR requirement in the same period. Existing homeowners were able to unlock the equity in their homes to purchase additional properties.

Across New Zealand including Auckland, Investors and Multi-home buyers’ share has declined in July 2021. Potentially the policy changes in March are having the desired impact, to tilt the balance away from Investors and towards First Home Buyers, however it is important to note that it is still early days. Further exasperating this is the fact that new homes are generally marketed off plans during design phase or construction periods causing the settlement to be delayed until when the new home is complete and title issued, in the current market this could be up to 18 months away. The impact of the March 2021 policy shift is yet to be known for some time yet.

In the meantime, First Home Buyers are eager to enter the market and Investors are reassessing their position as mortgage rates started to rise. The tilt to First Home Buyers in July 2021 maybe the beginning of a new trend or a temporary balancing. The balance may swing in the near future once the new build consultation is completed by the IRD.

For further information or if you would like to understand more about new build purchases please contact or


First Home Buyer Investor Movers Multi Home Owner Re entering Market
Jan-20 41% 24% 18% 15% 2%
Feb-20 46% 21% 17% 14% 3%
Mar-20 43% 20% 17% 16% 4%
Apr-20 41% 30% 12% 14% 2%
May-20 48% 18% 17% 14% 2%
Jun-20 47% 18% 19% 12% 4%
Jul-20 45% 22% 17% 14% 2%
Aug-20 46% 22% 18% 11% 3%
Sep-20 47% 20% 16% 14% 3%
Oct-20 44% 25% 17% 12% 3%
Nov-20 45% 23% 16% 14% 2%
Dec-20 42% 25% 16% 14% 3%
Jan-21 41% 22% 19% 16% 2%
Feb-21 41% 23% 15% 18% 3%
Mar-21 44% 21% 17% 16% 2%
Apr-21 39% 24% 19% 15% 3%
May-21 41% 26% 13% 17% 2%
Jun-21 40% 24% 17% 17% 2%
Jul-21 45% 18% 17% 18% 4%

Table 1: Buyer Composition – New Zealand 







Figure 1: Sale Price to Capital Value Ratio

There were delays between the valuation dates in July and the value release date in November. This period allows for sales reporting lag and audit by the Office of Valuer-General. By the time the values were released they were close to five months old and may not reflect the market condition in November.

Impact on sales volumes and sales prices

Valocity then analysed the impact of the new CV’s on sales volumes and sales prices in the period immediate after the public release date  of the new Capital Values.

Figure 2: Median Sale Prices and Sale Volume

Key findings;

  • The release of the valuation did not have any significant impact on the median prices achieved
  • Sales activities also appear to behave independently of when values are released

Contrary to popular belief, there also does not appear to be a significant correlation between the new capital values being released and mortgage market activity.

Figure 3: Refinancing Registration as Percentage of Overall Mortgage Activity

Research conclusions

As well as Territorial Authorities utilising Rating Valuations to distribute their rates requirements amongst ratepayers, they are also often referenced by many as a baseline to what is happening in the market.

There doesn’t appear to be any significant linkage between sales price, market activities and mortgage registrations with the release of the rating valuations. The market has been buoyant over the past four years. All market participants are well aware the previous valuations completed in 2017 have become outdated.

It appears that other than a very highly visible and ‘hot conversation topic’ – many market participants are basing purchase activities on other market metrics, as opposed to the properties Capital Value. This is reassuring as the Capital Value of a property is only designed to be used for Rating purposes. The lag between the valuation date and release also means that Auckland’s new values will most likely already be outdated by the time of the December release.

For further information or if you would like to understand more about the impact of the Auckland 2021 reevaluation in relation to buyer types, please contact or