Auckland rating valuations’ residential ups and downs
December 3rd, 2014 by Steve McNamara
3 December, 2014 media commentary
The magnitude of the “inconsistencies” in the latest Auckland property revaluation is becoming glaringly obvious with a leading residential property valuer calculating more than 30% of the new valuations are “wildly wrong.”
This has been likened to residential property owners being left to play ups and downs, not unlike a game of snakes and ladders, with the value of their properties.
Property InDepth Ltd has “crunched the numbers” and has also found “inconsistencies” across the board in its comparison of Auckland Council’s new capital valuations with more than 300 house sales in the city during October.
Yet Auckland Council has described the capital value quoted on its rating revaluations (RVs) as “the most likely selling price had the property (including buildings and all other improvements on the land, excluding chattels) been sold on 1 July 2014” www.aucklandcouncil.govt.nz
As an independent valuer of large numbers of residential properties, Property InDepth calculates that more than 30% of the new rating valuations are already “wildly wrong” when compared to actual property sales throughout the city. With 86% of Auckland’s 525,000 properties – or around 451,500 being residential – that’s about 135,000 properties that could have new valuations that are “way off the mark”.
Both Steve McNamara and Steve Tucker, co-founders of Property InDepth, consider these “inconsistencies” to be significant. They have found “a massive range” between what individual properties’ new rating revaluations are and what they have subsequently sold for.
Their research shows that some properties have already sold for way above their new 2014 revaluations, even before they were released, while others sold for well below their new rating revaluations.
“This has led to a serious situation where individual property owners having little or no idea whether their particular property is either under or over-valued, resulting in there being hundreds of thousands of dollars in financial assets potentially at stake, particularly if they’re looking to sell, “ Mr McNamara warns.
“This alarms us because so many people rely on these RVs to value their properties. Anyone intending to sell their property, or buy one, is advised to seek a professional valuation to give them peace of mind. They will also need professional advice if they are going to get their valuation objections in before the December 23 deadline,” Mr Tucker adds.
Aware that this problem could arise, Auckland Council has also warned people against using their new valuations for anything other than what they were intended for, namely helping to set its rates. “They are not intended for other purposes such as marketing or for mortgages. We strongly recommend that private registered valuations be obtained for these purposes.” www.aucklandcouncil.govt.nz
While there have already been calls to overhaul or scrap the mass appraisal system used to revalue Auckland every three years, few people have suggested what it should be replaced with. Mr McNamara believes South Australia might offer a viable alternative.
“I used to carry out valuations in South Australia where they do them annually. Every year they then get the opportunity to tidy them up which is easier to do, reducing the need for larger variances.”
He believes this would be a cost-effective option to investigate.
October residential property sales:
Auckland Central –
The October residential property sales figures show there is a massive difference between what some residential properties have sold for considerably more than their latest rating values (RV) are. These seesaw between 51% above RV to 39% below RV.
A residential property in Blockhouse Bay Road, for example, sold for $860,500, $290,000 – 51% more than its $570,000 RV. Yet another property in the same area, this time in Donovan Street, sold for $650,000, $220,000 – or 25% below its $870,000 RV.
A residential property in Mount Albert Road sold for $2.25 million, $650,000 above its latest $1.6 million RV.
A residential property in Kimberley Road, Epsom sold for $4.68 million, selling for $880,000 above its latest $3.8 million RV. However, a residential property in Wheturangi Road, Epsom sold for $2.61 million – $1.64 million below its latest RV of $4.25 million.
A Rangitoto Avenue property in Remuera sold for $2.5 million, $565,000 or 29% above its RV of $1.9 million. However, two properties in the same suburb – one in Kenneth Small Place and the other in Dell Avenue – both sold for well under their latest RVs. The Kenneth Small Place home has sold for $680,000, $240,000 below its $920,000 RV. The other, Dell Avenue example, sold for $1.1 million, $280,000 below its $1.38 million RV.
As these October sales figures show the majority of properties (88%) have sold for sums of up to 43% more than their latest valuations. Most have sold for between 17% – 36% more than their RVs.
In Mangere a Massey Road property sold for $650,000, $195,000 or 43% above its $455,000 RV but a Lawford Place property sold for $290,000, $60,000 below its $350,000 RV. Another property, this time in Tennessee Avenue, sold for $530,000, $160,000 above its $370,000 RV.
Over in Pakuranga a Snell Place property sold for $635,000 or $155,000 above its $480,000 RV. However, in the same period, a William Roberts Rd property sold for $580,000, $110,000 below its $690,000 RV.
In Papatoetoe properties are generally selling for 20%-36% above their latest Rating Valuations. A Raymond Road home sold for $620,000, $165,000 above its $45,000 RV. A Coronation Road home sold for $670,000, $120,000 above its $550,000 RV.
A Point View home in Dannemora sold for $965,000 above its $1.45 million RV for $2.41 million but a Te Pene Road property in nearby Maraetai sold for $160,000 below its $1 million RV.
West Auckland –
Across West Auckland the majority of residential properties sold for considerably more than their new rating valuations.
In Henderson a Powell Place home sold for $520,000, $160,000 above its or 44% above its $360,000 RV. Another in Checkerberry Crescent sold for $720,000 or $155,000 more than its $565,000 RV. However, this trend was not across the board as a Millstone Lane home sold for $480,000, $110,000 below its $590,000 RV.
In Massey properties in Don Buck and Aldern Roads have sold for $90,000 and $111,000 above their new RVs but a Carillon Place home sold for $365,000, $175,000 or 32% below its $540,000 RV.
Many Green Bay homes are selling above their RVs too. A Vinceroy Road property sold for $770,000, $130,000 above its $640,000 RV and one in Lantana Road, for $665,000, or $125,000 above its $540,000 RV.
In West Harbour a Ballial Place home sold for $555,000, $155,000 or 39% above its $400,000 RV. However, a Rena Place property sold for $95,000 below its new revaluation. It sold for $435,000 compared with its $530,000 RV.
North Shore –
In Devonport a Victoria Road property sold for $1.7 million, 51 % or $575,000 above its $1.1 million RV. Other properties in the suburb to sell for considerably more than their RVs were in Regent Street, selling for $$1.2 million, $377,000 above its RV; Fraser Road, selling for $1.3 million, $260,000 above RV; and Hanlon Crescent, selling for $1.2 million, $250,000 above RV.
However, elsewhere in Devonport other properties, in Ewen Alison Ave and Church Street, have sold for $140,000 to $160,000 below their RVs.
Up in Castor Bay a Commodore Parry Road property sold for $2.3 million, $780,000 above its RV and another in Castor Bay Road, sold for $1.6 million, $545,000 above RV. A Chevron Place home property sold for $250,000 above RV as well but there were exceptions to this with a Aberdeen Road property selling for $1.6 million, $240,000 below RV.
In Bayswater several properties have also sold well above their new revaluations. An Eversleigh Road property sold for $870,000, $240,000 above RV, and another home in the same street, sold for $140,000 above its RV. A similar situation exists in Torbay but, yet again, there are still inconsistencies with a Cliff Road property selling for $158,000 below RV.
Over in Beach Haven several properties have also sold for 20-26% their RVs. One in Cresta Avenue sold for $606,000, $$126,000 above RV, and another in Lancaster Road, for $640,000, $130,000 above RV.
Note: All sales quoted were in October 2014 and the Auckland Council rating values were released in early November, effective from 1 July, 2014.