March 28, 2025

Understanding Property Valuations: A Homeowner’s Guide to Maximising Value

Property valuations play a vital role in managing the most significant asset many people own, which is their home.

Knowing how valuations work can assist property owners with decisions about selling, refinancing or renovating. This guide covers the main points of property valuations, the meaning of rateable and capital values, and ways to add value without overspending.

What Property Valuations Involve

A property valuation is a formal assessment of a property’s worth at that particular moment. Banks, buyers, sellers and insurance providers rely on valuations to confirm the true market position of a property. The assessment typically considers the location, size, property features and comparable sales in the same area. A registered valuer inspects all aspects of the home and presents a professional report that details an opinion of the likely market price.

Valuations differ from automated figures that appear on free property websites. Since those platforms use sales trends and public data, they may not reflect a home’s unique features or recent updates. A professional valuation, on the other hand, gives an objective figure supported by evidence.

Key Reasons to Arrange a Valuation

• Mortgage Applications or Refinancing
  Lenders may require an independent valuation before granting a mortgage or approving a top-up. The property’s value helps determine loan terms and risk assessments.
• Buying or Selling
  When owners have an accurate valuation, they are in a better position to set or negotiate the right purchase price. Buyers can feel more confident, and sellers reduce the chance of a sale falling through.
• Insurance Needs
  An accurate valuation helps ensure adequate cover for rebuilding or repairing in the event of damage.
• Renovations
  Valuations can indicate if planned improvements will enhance the property’s saleability and possibly boost equity.

Rateable Value, Capital Value, and Government Value

Owners may see references to Rateable Value (RV), Capital Value (CV) and Government Value (GV) on council documentation. These tend to be used for setting local property rates rather than indicating market value. These figures are usually updated every three years and do not always reflect the current price a buyer is prepared to pay. Market value can sit above or below these values, depending on factors such as the property’s condition, economic changes, or local demand.

Improvements That May Add Value

Small, considered upgrades can lead to a noticeable return, as long as they are compatible with the property’s character.

• Kitchen and Bathroom Upgrades
  These spaces often have a major impact on how a property is perceived. Owners who refresh cabinetry, replace worn fixtures or improve lighting can see positive changes to market appeal.
• Exterior Maintenance
  Tasks such as painting, landscaping and adding well-maintained fences usually boost street appeal. Any first impression enhancements create a better overall view for potential buyers or valuers.
• Quality Garaging
  In areas with limited parking, a garage or enclosed carport can lift a property’s value. Proper design that fits in with local requirements matters too.
• Preserving Character Elements
  Period features like native timber floors or original joinery can be an asset in older homes. Replacing them with modern alternatives may diminish the property’s uniqueness.

Avoiding Overcapitalisation

Homeowners sometimes spend heavily on upgrades that fail to recoup costs at resale. Understanding typical prices in the neighbourhood helps gauge the appropriate renovation level. High-end additions may add limited extra value to a modest home in a mid-range market. Speaking to a mortgage adviser or property expert before embarking on costly projects can help prevent this issue.

Timing a Valuation

Some owners schedule a valuation when preparing to refinance or if they plan to sell within the next six to twelve months. Others do so before launching a renovation, to confirm if the improvement will lift equity. A professional opinion at the right moment can prevent underestimating or overestimating a property’s market position.

Next Steps for Homeowners

Property valuations supply useful data for decisions about the home’s future, including borrowing, selling or enhancing its condition. Working closely with valuers, real estate professionals and mortgage advisers forms a better foundation for success. The team at Capital Advice helps homeowners review all relevant factors to set a sound strategy.

Contact Us Today

Capital Advice
Mortgage & Insurance Brokers, Wellington
Phone: +64 4 495 5903
Email: info@capitaladvice.co.nz
Address: 344 Tinakori Road, Wellington, 6011