Rating Valuations & Reality
November 13th, 2014 by Steve McNamara
Learning that your biggest asset, your property, may have increased in value by hundreds of thousands of dollars based on it’s 2014 rating valuation is good news in anyone’s books.
The dollar figures put on the latest 2014 Rating Valuations or RVs – covering both the land and capital value (improvements) on a property – may look mighty impressive on paper but – are they?
How accurate are these figures and do we run the risk of being blinded by the dollars and cents involved?
Many councils throughout the country – not just in Auckland – are in the process of releasing their three-yearly assessments of what individual properties are worth.
Thames-Coromandel, Rotorua, Stratford, Napier, Masterton and the Wairarapa – are all due to release their new property revaluations this month. Kaipara, Tararua, Tasman, Clutha and Timaru follow in December. A number of other councils – including Waikato District, Ruapehu, Kapiti, Queenstown and Invercargill – are already part way through the objection process.
In Auckland property owners are now receiving their new rating valuations buoyed by the news that in three years the average residential capital value across the city has risen by 34.8%. This has residential property values increasing (percentage-wise) way ahead of commercial, industrial, lifestyle and rural properties across greater Auckland. However, even before the new property revaluations arrive in everyone’s letter boxes, leading property experts are urging caution.
Only a snap-shot
While some have described property value hikes in some suburbs as reflecting the frightening reality and the biggest seen anywhere in New Zealand since the 1970’s, Valuer-General Neill Sullivan describes Auckland Council’s valuation as only a snap-shot of market values as at July 1, 2014 and it may not tell the full story.
“One important thing is that it’s not suitable for use for insurance purposes,” he said. “The market is dynamic; it changes on a weekly and daily basis… By the time [property owners] actually get their values in November, the value of their property might have changed.” (Sunday Star-Times, October 19)
Along with other professional valuation companies Property InDepth agrees that buyers and sellers should only consider these council RVs as a rough-and-ready guide. They may already be well out of date, particularly in the fast-moving Auckland market, and they may only reflect the value of a neighbourhood rather than an individual house.
David Clark, chief executive of the Property Institute, is still urging buyers and sellers to get a market valuation done when buying or selling property, with these taking into account specifics which a council valuation might not.
If Auckland property owners believe their values are incorrect they will have until December 19, 2014 to formally object to them.
Property InDepth wants to help unsure homeowners establish what their homes are accurately worth today, tomorrow and next week. Our valuers specialise in residential, lifestyle and property insurance valuations. Booking an accurate home valuation is a simple process and starts with calling 0800 463 378 or by emailing us via our online form.
For further information on Auckland Council’s revaluation and objection process visit: http://www.aucklandcouncil.govt.nz