In recent months finding data about a property has become a
whole lot easier, thanks to two free APPs.
Trademe has just released a new tool called ‘Property
Insights’ which it says “provides property data and information about
residential properties across New Zealand, empowering Kiwis to make better
property decisions”.
They go on to say, “The site has a database of 1.5
million New Zealand homes, including their rateable values, previous sales
price, information on when the house was built and its floor size. It also
generates an estimate of the home’s current value – based on the sales of
similar properties and details of listing and user activity on Trade Me.”
Trademe’s site follows just months after the release of
another free valuation tool called ‘Homes.co.nz’, which does pretty much the
same thing. In both cases the data is supplied by local councils, including the
sold data, and is updated monthly.
Both sites claim to apply a secret algorithm, which they
guard like KFC’s secret fried chicken recipe. The truth is probably they are
using a traditional valuation approach which estimates a market value by
comparing its rateable value to recent sales nearby and how the sale price of
that property compared to its rateable value. I doubt that either site has
discovered a miracle algorithm that will transform (“disrupt”) the valuation
industry.
Both sites obtain their data from the same source so both
have to deal with the inaccuracies of that data, and the fact that the
assessments are a desktop approach and not based on an inspection of each
property.
Both are upfront about these limitations and are at pains to
point it out in various disclaimers. Trademe shows the limitations of the data
for a particular property as a star rating, from no stars (“Not enough data to
create an estimate”) to five stars (“Most amount of data and smallest range”).
The more stars, the more confident Trademe is about the estimate.
Homes.co.nz enables the homeowner to update the information
about their property which may be useful for those who wish to correct errors,
but some will be reluctant to add further detail given it’s open access to
everyone, including nosy parkers and those with criminal intent.
To see how consistent the two sites are I have compared the
valuations of two fairly typical three-bedroom properties in a provincial city.
For the first, Homes.co.nz had a price range of $320k-$375k, with a mid-range
estimate of $350k. For the same property, Trademe had a price range of $350k to
$430k and an estimate of $390k. In this case there was an 11% difference,
Trademe being the higher.
For the second property, Homes.co.nz had a price range of
$440k to $510k, with an estimate of $475k. Trademe’s price range was $390k to
$490k and $440k as an estimate. In this case the difference is 8%, with
Homes.co.nz being the higher.
So what can we take from this comparison? There is no right
answer to property valuation! Valuers and valuation APPs use different
benchmark data, and may apply different formulas when estimating value. Those
factors have a material effect on the result, which is why one always needs to
look at the machinery behind a valuation to judge its reliability. Desk-top
valuations are always nothing more than an indication of value. Every property
is unique, as is each buyer with their own desires and intentions.
However, that is not to diminish the value of the Trademe
and Homes.co.nz tools; they provide a ballpark figure, which is useful in the
pre-due diligence stages of house hunting and to those who have a casual
interest in knowing the value of their home.
What does surprise most people is just how much property
information is available for the public to view, including the media who are
starting to use the data in stories about the rich and famous – and infamous.
Most people assume details about how much they paid for a property or how much
it’s worth are confidential. Not so I am afraid. Satisfying those little
curiosities is easy, and free.
There are other sites available on a paid subscription basis
that extend the database further, enabling the user to search the entire NZ
property register. That means the property holdings of an individual may be
revealed with the click of a mouse. The data has always been available – it’s
just that it’s a whole lot easier for a layperson to access now.
The links are:
3 comments:
Valuations with a range of eighty or a hundred thousand dollars are hardly smart property data.
More like Valuation valueless.
This is a complex situation saturated with emotion,greed,useless numbers and intention. What is the 'valuation' for..? Mortgage situation (measuring the value of the co-lateral) v's Sales situation intention. Both different 'roads for sure'. As for a registered 'valuation' an expensive load of speculation not worth the paper it is printed on. Produced often by the wrong person for the job with no local knowledge. Welcome to the world of Not so smart property data ....!!!
As a general rule in the valuation industry, valuations that are within a 10% variance are considered "normal". This recognises there is an element of subjectivity about valuations but within an accepted range.
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