Recently Auckland Council released the re-valuation of properties within its jurisdiction. These valuations have an effective date of

1 July 2011.  The Rating Valuations were undertaken by Quotable Value New Zealand.  QV define the rating value as the “likely, or probable, price a property would sell for at the time of re-valuation (July 2011) although this does not include chattels”.

 

It is with concern that we note that in a number of instances the Rating Valuation does not accurately reflect “market value” i.e. the value the property would likely achieve if sold on the open market under normal market circumstances.  A comparison between actual sale prices and RV’s for those properties sold around, and since, the effective date, makes this readily apparent.  Sales data indicates that whilst many properties are selling around or close to their RV, there are a number which are selling both above and below. With property on the Hibiscus Coast the variance is from 35% below the RV to 25% above. 

 

For those who place reliance on the Rating Valuation as a guide to market value this could lead to serious consequences.  For a lender or financier, lending based on an RV could result in advancing funds in excess of the property’s market value, which may have serious consequences downstream.  For a vendor there is the possibility that if they price their property based on the RV, they may under sell if it is less than true market value or may end up not selling their property if the RV is excessive.  Similarly a purchaser may potentially pay significantly over the market for a property if they based their decision on an RV which is excessive. 

 

Where there is a clear pattern or correlation between the RV and market value, it may be acceptable as a rough guide to market value, however recent sales indicate there is no clear pattern and therefore we would recommend no reliance be placed on the RV for buying, selling or financing a property.

 

It should be pointed out that the RV is completed using mass appraisal techniques and, in most instances, does not involve a detailed inspection of each specific property.  Only improvements where a Building Consent has been obtained will be taken into account and thus the standard, nature and quality of the interior of a building is often completely unknown to the rating valuer.  It is only by using a Registered Valuer with strong local knowledge that an accurate and reliable market valuation will be obtained.

 

To support our contentions we have considered sales data in the local area.  We acknowledge there may be a limited number of sales quoted which may have had special circumstances relating to them, or, for various reasons, could not be considered strictly bona fide.  Nevertheless, to the best of our knowledge, the sales detailed are straightforward market transactions.  To preserve client confidentiality street numbers of property addresses have been removed.

 

The percentages in red indicate the percentage the Rating Valuation is above the actual sale, those in blue the percentage the Rating Value is below the sale price.

 

RECENT SALES RELATIVE TO NEW RATING VALUATIONS
Hibiscus Coast 

Address	Sale Date	Sale Price	2011 RV	+ / - %
The Circle, Manly	Aug - 2011	$286,000	$335,000	15%
Shakespear Rd, Army Bay	Sep - 2011	$315,000	$364,000	14%
Whangaparaoa Road	Sep - 2011	$321,000	$410,000	22%
Centreway Rd, Orewa	Aug - 2011	$367,000	$315,000	17%
Bonita Ave, Stanmore Bay	Sep - 2011	$425,000	$350,000	21%
Kotanui Ave, Army Bay	Sep - 2011	$430,000	$510,000	16%
Bay Vista Drive, Red Beach	Sep - 2011	$465,000	$520,000	11%
Edward Ave, Orewa	Aug - 2011	$520,000	$435,000	20%
Motutapu Ave, Manly	Sep - 2011	$520,000	$480,000	8%
Rawhiti Road, Manly	Aug - 2011	$525,000	$465,000	13%
Commodore Court, Gulf Harbour	Sep - 2011	$557,500	$500,000	12%
Roberta Crescent, Orewa	Sep - 2011	$560,000	$495,000	13%
The Crescent, Tindalls Bay	Oct - 2011	$575,000	$810,000	30%
Riverside Rd, Orewa	Sep - 2011	$580,000	$520,000	12%
Savoy Rd, Orewa	Sep - 2011	$650,000	$700,00	8%
Chesterfield Way, Orewa	Aug - 2011	$660,000	$590,000	12%
Prospect Tce, Silverdale	Sep - 2011	$665,000	$610,000	9%
Whangaparaoa Road, Manly	Sep - 2011	$700,000	$780,000	11%
Clansman Tce, Gulf Harbour	Sep - 2011	$710,000	$1,080,000	35%
Maygrove Drive, Orewa	Oct - 2011	$750,000	$675,000	11%
Tiri Road, Manly	Aug - 2011	$765,000	$610,000	25%
The Crescent, Tindalls Bay	Sep - 2011	$770,000	$620,000	24%
Hobbs Road, Matakatia	Aug - 2011	$940,000	$820,000	15%
Whangaparaoa Rd, Tindalls Bay	Sep - 2011	$1,175,000	$1,475,000	20%
Scott Road, Stanmore Bay	Sep - 2011	$1,250,000	$1,025,000	22%
Myra G Place, Arkles Bay	Aug - 2011	$1,700,000	$2,025,000	16%
The Circle, Manly	Oct - 2011	$418,000	$450,000	8%

Reasons for having your property valued may include:
• Sale purposes

• Financial/Mortgage purposes
• Matrimonial disputes

• Market Rentals and Arbitration
• Compensation

• Purchase advice

Other Services provided by Hollis & Scholefield Ltd include:
• Replacement Insurance Assessments

• Advice on Property Development
• Advice on Property Investment

• Market Research

CONTACT MIKE MORSE ON 09 427 9903 / 0274 909211 or mike@hsl.net.nz