Treat big gains with caution: Newland
Property investment expert Olly Newland says stories of properties selling well above their CVs should be taken with a pinch of salt.
Monday, July 9th 2012, 12:00AM
by Susan Edmunds
On Friday, the New Zealand Herald reported on a Mt Albert house that fetched $416,000 above its CV.
The Monaghan Avenue property had a council valuation of $670,000 but sold at auction for $1.086 million.
It was on the market for 23 days and had a reserve “in the $900,000 bracket”.
Newland said: “There is no doubt that there is a feeding frenzy for popular houses in popular price ranges but the fact is that examples like this are the exception and not the rule.”
He said rising prices in Auckland had started to spread to other main centres.
He estimated there had been a 10% to 1% increase over the past 12 months in “good, leafy suburbs” in Auckland.
“But the extremes like this example are rare. It is not hard to find just the opposite examples of great losses as compared to CVs. And that’s the point. CVs are rough estimates and and should not be relied upon. When a CV is computer-created there is far too room for error. Registered valuations are far more reliable.”
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