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 in the Wainui, Waitoki, Dairy Flat, Silverdale region the variance is from 43% below the RV to 84% above. In the Helensville, Kaukapakapa, South Head localities the variance is -38% to +29%.
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 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 contention 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
Wainui - Waitoki - Dairy Flat - Silverdale
Address Sale Date Sale Price 2011 RV +/- %
Frost Rd, Waitoki Nov-11 $1,200,000 $1,550,000 -23%
Kahikatea Flat Rd, Waitoki Aug-11 $850,000 $690,000 23%
Whitehills Rd, Dairy Flat Aug-11 $730,000 $670,000 9%
Old Pine Valley Rd. Silverdale Jun-11 $920,000 $1,050,000 -12%
Wainui Rd, Wainui Aug-11 $735,000 $820,000 -11%
East Coast Rd, Silverdale Jul-11 $905,000 $730,000 24%
Postman Rd, Dairy Flat Jul-11 $960,000 $900,000 7%
Dairy Flat Highway, Dairy Flat Jul-11 $790,000 $710,000 11%
Windmill Drive, Wainui Jul-11 $805,000 $840,000 -6%
Top Rd, Dairy Flat Sep-11 $365,000 $640,000 -43%
Colgan Lane, Waitoki Sep-11 $4,500,000 $2,450,000 84%
Upper Waiwera Rd, Wainui Sep-11 $880,000 $735,000 20%
Upper Orewa Rd, Wainui Oct-11 $975,000 $1,100,000 -12%
Blackbridge Rd, Dairy Flat Sep-11 $1,425,000 $1,100,000 29%
Young Access Rd, Silverdale Oct-11 $975,000 $880,000 11%
RECENT SALES RELATIVE TO NEW RATING VALUATIONS
Helensville – Parakai - South Head - Kaukapakapa
Address Sale Date Sale Price 2011 RV +/- %
Parakai Ave. Parakai Jul-11 $300,000 $275,000 9%
Te Kauri Place, Helensville Aug-11 $450,000 $400,000 13%
Te Kauri Place, Helensville Aug-11 $425,000 $390,000 9%
Amberly Rise, Helensville Aug-11 $439,000 $395,000 11%
Makiri St, Helensville Aug-11 $340,000 $310,000 10%
Puriri St, Helensville Aug-11 $319,000 $350,000 -9%
Awaroa Rd, Helensville Jun-11 $245,000 $300,000 -19%
Te Kanae Rd, South Head Jun-11 $560,000 $590,000 -5%
South Head Rd, South Head Aug-11 $780,000 $800,000 -3%
Pinchgut Rd, Kaukapakapa Sep-11 $325,000 $300,000 8%
Henley Rd, Kaukapakapa Sep-11 $737,000 $670,000 10%
Dormer Rd, Kaukapakapa Jul-11 $480,000 $425,000 13%
Oyster Point Rd, Kaukapakapa Aug-11 $650,000 $570,000 14%
Garfield Rd, Kaukapakapa Sep-11 $485,000 $365,000 32%
Rimmer Rd, South Head Sep-11 $560,000 $900,000 -38%
Quail Rd, South Head Aug-11 $600,000 $465,000 29%
