By Chris Schulz
Investigative Journalist | Kaipūrongo Whakatewhatewha
How much can you trust property price estimate tools? Consumer NZ talked with those who rely on them and those who are frustrated by them to find out more about the tricky process of estimating property values.
For the past 12 months, Heather has been trying to buy a house. During breaks at work, she refreshes her searches on Trade Me and realestate.co.nz, looking for an Auckland property that she and her family might be able to afford.
Once she finds a place she likes, her next stop is a property price estimation tool, something almost everyone in the property market is using. “I need to know how much the house might cost me,” says Heather. “It’s the only way I can know if I should bother looking into it further.”
Websites like homes.co.nz, oneroof.co.nz and propertyvalue.co.nz offer Heather a quick and often free estimate of what a property might be worth. That, she says, gives her an indication of whether it’s worth turning up to the open home, chatting to the agent, booking a building inspection, then negotiating a price.
Whether they’ll admit to it or not, everyone is using those tools. Homeowners use them to check what their house might be worth and whether it’s the right time to sell. Real estate agents use them, too, with some telling Consumer they frequently have to correct people when the estimates don’t line up with what they believe is the property’s actual worth.
Then, there are buyers like Heather who use the tools to dream about getting a foot in the housing market. “Real estate agents like to say those indicators don’t mean anything, but we need something to get an idea if it’s in our price range,” she says.
The question is, how accurate are these property pricing tools?
Be careful what you wish for
Greg Allen-Baines, a real estate agent for Ray White Kumeu, isn’t a fan of property pricing tools. He calls them “confusing” and says he’s often tasked with correcting prospective buyers when they quote the estimates at him. “For the most part, it’s giving them a false expectation of what a property might be worth,” he says.
This, Allen-Baines says, is because the estimates are created using computer-generated algorithms. They don’t visit a property and can’t take into account external factors, like swimming pools, major renovations or stellar views. “They don’t consider what work has been done to a house during the process of the current ownership,” he says.
He regularly sees disappointed homebuyers who arrive at open homes only to be told a property is probably outside their budget. “You quite rightly get indignant when you go to a property [and] find that it’s not what it appeared to be in your research.” The number of people this happens to, Allen-Baines says, “is really quite incredible”.
Renovations, the addition of a second dwelling or even a lick of paint and new carpet can all push up the price of a home. And the algorithms can’t pick up such improvements. But there’s another factor that can influence the sales price: a vendor’s reason for putting the property on the market in the first place.
Julian Blanchard, from Harcourts Timaru, says a motivated seller can heavily impact the price. “If you’ve just got a new job somewhere else, and you need to sell your home to move, your motivation is going to be [high]. Vendors may then accept a much lower price than those estimates suggest,” he says.
Like Allen-Baines, Blanchard is frustrated by property price estimate tools’ “arbitrary” pricing and often has to correct buyers about what a house might be worth. “These estimates can be a long way out,” he says. “Buyers should use them with some caution.”
How house price estimate tools work
Most of the property pricing companies we surveyed admit their estimates come via algorithms that combine recent sales figures with council valuations and other available data.
Trade Me property customer director Gavin Lloyd, who runs homes.co.nz, says its algorithm takes into account “property attributes, rates assessments, previous and current transactions, and agent appraisals”.
The property pricing websites’ fine print often offers disclaimers. OneRoof admits its estimates should only be used “as part of your overall property research” and don’t include “external factors” that could impact the sale price.
Property Value says it offers advice of “a general nature [that] should not be construed as specific advice”. It does not guarantee the “accuracy, currency or completeness” of its data.
The estimates on homes.co.nz are not a “formal valuation” says Lloyd, but rather a starting point for someone attempting to determine a home’s value. “We acknowledge an algorithm is unlikely to be as accurate as a physical inspection … we encourage customers to get an appraisal from a local agent.”
In some cases, property price estimates have been changed manually. Blanchard says homeowners and agents can apply to have the estimates adjusted if they believe they’re too high or too low. He says he’ll apply for an adjustment if the price is obviously way off and would mislead buyers.
“Homeowners can update their estimate if they complete a renovation and provide us with documentation from a registered valuer that this has changed the property’s value,” Lloyd agrees, but there are rules that must be followed. “We only accept formal valuation reports from registered valuers.”
Why are we obsessed with house prices?
It’s an easy question to answer, says Dr Arshad Javed, a senior lecturer in property studies at Massey University. For many of us, a house is the biggest investment we make, so its worth is intrinsically tied to our financial wellbeing, and therefore our emotions. If house prices are dropping, “it’s not a good feeling,” says Javed.
Javed points to the post-Covid-19 housing boom, when prices went through the roof and became unaffordable for many. They’ve since dropped for a number of reasons. “The overall economy is being impacted by the global supply chain, the wars in the Middle East and Ukraine, even the tariffs from Donald Trump,” he says. “And people are losing their jobs.”
That means a house that was worth $1 million in 2021/22 might have dropped to around $800,000 in the current market. “For people who bought property at that time – their equity is already gone,” says Javed.
Javed says there’s a different figure would-be buyers should be looking at. When the market is dropping, he says the price a house might go for could be much closer to its rateable value. “That is the main indicator when the market is not doing well,” he says.
How to estimate a house price properly
Allen-Baines says estimates should only be a small part of the equation for buyers. “Make some enquiries behind the scenes … do your homework,” he says. “Start by looking at the property and talking to the agent. Get the council records, look at the capital value and get an idea of recent sales in the neighbourhood.”
A registered valuation could do that work for you and give a more accurate price, but will cost you money. Realestate.co.nz suggests a valuation will set you back $900–$1,250 for each property – more for larger or more complex properties.
When relayed the findings of this investigation – that house price estimates can be inaccurate and misleading – Heather said, “You’d have to wonder what’s the point of price indicators if they’re way off target. If anything, that makes it harder to look for houses in my price range.”
Four homes, four estimates, four sales
We surveyed four homes for sale around the country in October 2025, noting their estimated values on property pricing websites at the time of their listings, then comparing those with the price they eventually sold for to see how close the two amounts were. Here’s how they measured up:
Auckland
A small, three-bedroom, two-bathroom recently built Takanini home sitting on just over 200 square metres of land was estimated at $666,000 by realestate.co.nz and $745,000 by homes.co.nz but had an asking price of $795,000. It sold for $790,000 on 24 October, much higher than both estimates.
Hamilton
A four-bedroom, two-bathroom brick-and-tile home in Fairview Downs on nearly 700 square metres of land was estimated at $823,000 by realestate.co.nz and $790,000 by homes.co.nz. But, on 3 December, it sold for $770,000, lower than those estimates had suggested.
Wellington
A large five-bedroom, two-bathroom home on Burma Road in Khandallah on 585 square metres of land was estimated to be worth $1,005,000 by realestate.co.nz and an average of $1,050,000 by homes.co.nz. It sold on 17 November for $1,195,187 - far more than those estimates suggested.
Christchurch
A well-presented three-bedroom, two-bathroom Halswell home on nearly 600 square metres of land was estimated at $893,000 by realestate.co.nz and $885,000 by homes.co.nz. But, on 29 October, it sold after just 6 days on the market for $930,000, much more than either of those estimates suggested it would.
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