During the last 6 years of mortgage broking this is one question we always get asked. Funny thing is that the reply is as varied as the people who ask it and its often a case of ‘well, it depends’. This post won’t give you a definitive answer but read on though, I think you’ll find it interesting.

I noticed something the other day in a regular report I get from Vicki Phillips, a local property valuer who operates near me up on the Hibiscus Coast. A large part of her report is made up of tables showing recent sales in different suburbs.

I looked closely at the figures. What I noticed was that many properties had sold between October and December 2010 for less than their council valuations.

A suburb summary showed the following sale price versus CV results:

  • Gulf Harbour and Army Bay — 16% below CV
  • Red Beach — 5% below CV
  • Stanmore Bay, Arkles Bay, Manly — 5% below CV
  • Kumeu and Helensville — 13% below CV
  • Omaha — 4% below CV
  • Warkworth — 5% below CV

By contrast many of the sales on the North Shore were either 1% above or below the council valuations, so not much variation there.

One final and very important point — there were sales in virtually every suburb where the difference was 12, 13, 17 and in one case a whopping 21% below the council valuation.

The upshot:

  1. A 5% discount is worth at least $20,000 off, sometimes more
  2. Theres a good deal in every suburb and
  3. In this market, you don’t have to hunt too far to find it

Realise that well priced property in a good location will move very quickly. If you require a mortgage your  mortgage pre-approval needs to be current so you can pounce quickly!

PS: you can find out the CV for most properties by going to the relevant local council website.


About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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