What you need to know
Patiently awaited, the latest Government Valuations have been recently released in the last fortnight, being the first review in over 4 years.
Normally a 3 yearly cycle, all the G.V’s have been delayed due to Covid-19 and should have been updated as of 1st June 2020. This has meant that ratepayers have not seen their latest Government Valuations until now which are backdated, carrying an effective valuation date of 1st June last year.
In terms of process, the appointed Valuers completing this exercise locally for the Auckland Council and wider N.Z. rating role, were in fact analysing sales transactions of properties that were sold as their evidence, in the months leading up to 1st June 2021.
Of course we know that the market was in a rapid state of increase during the bulk of 2021 and hence using sales evidence months before June now places some of these Government Valuations well behind their true market values.
This is even due to the slight softening in values that we have experienced in Auckland so far in 2022.
If you wish to object to the Government Valuation on your property or investment properties, there is a 6 week period to do so from the date that the recent G.V. was notified to you. This is a free re-evaluation service, however you do need to provide evidence of why the G.V. is perceived to be either too low or too high.
Government Valuations also provide an apportionment of land value, the added value of improvements and the total = capital value. What you may not know, is that your G.V. does not include chattels, which can be a sizable amount – such as carpets, light fittings, appliances, heat pumps and other items.
The initial analysis of the Government Valuations that I have seen so far, there are a number of properties that have a very high land value apportionment, with a nominal or minimal value of improvements for the dwelling. This can be quite misleading as the property may well have a dwelling that is plonked right across the section, or with no means of accessing the rear portion, thus creating subdivision constraints or in the construction of further dwellings impractical and costly.
As a process, the appointed Government Valuers completing these mass appraisals calculate the land value as though it is totally unimproved. That is, as if there were no improvements or dwelling on the land, thus accounting purely for the size of land and potential under the Unitary Plan to be split and/or subdivided into multiple townhouse sites. Hence the land value can be a very high apportionment, but not necessarily accurate or practical if the dwelling is a stunner, with way too much value to demolish.
There is a common misconception that a high G.V. will automatically result in a dramatic rise in your rates bill. This is incorrect, as the rates can only increase by a 10% quantum at one time.
Too many Sellers (and in fact Buyers) focus too heavily on the recent valuation and potentially what values have trended either up or downwards as a percentage to provide a guide on market value.
Being a qualified Registered Valuer (non practising) and more recently a licensed agent at Lochore’s for 21 years, in my view this is not a reliable and accurate method. Either a current registered valuation or a well researched appraisal from an experienced real estate agent familiar with that location and type of property.
As soon as Government Valuations pop out, this often stimulates a land owner to consider the likely market value of a property and thus questioning whether it is time. Time to make a change (heaven’s our latest lockdown gave us all time to think) or whether it is time to sell on an investment and take the capital gain. Or for the long hauler’s, perhaps it is time to buy a new investment to bolster the retirement plan and future income !
In this changing marketplace, we are exceptionally busy at present answering these queries and providing our existing clients sound advice and accuracy in terms of completing market value assessments.
As always, this is a free service and we would be delighted to help you as a valued client of our team and Lochore”s Ray White Birkenhead.
Should you have any questions regarding the Government Valuation process, placing an objection with an aim of changing your G.V., or in fact if you would like a market assessment of your property (if you are thinking of a change) – we would be delighted to help, just reach out.
Chris Gemmell AREINZ