New rating valuations on their way

Dunedin (Monday, 7 November 2016) – The latest rating valuations for Dunedin properties will be arriving in letter boxes this week.

In the Dunedin City Council area, there has been an overall 12.6% increase in capital value and a 19.5% rise in land value over the past three years.

DCC Acting Chief Financial Officer Gavin Logie says the data shows the average house in Dunedin is now worth $335,000, compared with the 2013 average of $289,800.

The commercial and industrial property market overall is showing small to moderate growth, with a 7.6% increase for commercial property and a 5.6% rise for industrial compared to 2013 capital value levels.

Every three years the DCC’s valuation service provider, Quotable Value, revalues properties for rating purposes within the DCC area. The revised rating values reflect a property’s market value (less chattels) as at 1 July 2016.

At the time of the revaluation, there were 55,185 rateable properties.

In terms of Dunedin residential properties, the biggest rateable value movements by suburb included Central City North (up 25.3%), Macandrew Bay and Broad Bay (up 20.8%), Brockville (up 20.7%) and Green Island (up 18.8%).

Individual rating revaluations may vary from the overall average for the suburb. The specific details of individual properties are available at www.dunedin.govt.nz/rates or www.qv.co.nz. Property owners and occupiers are entitled to object in writing to the revised valuations by 16 December 2016.

QV ratingvalue Registered Valuer Tim Gibson says, “The overall rateable value of the DCC area is now $24.9 billion, which is a 12.6% increase on the last rating revaluation in 2013.

“The market has increased sharply since the end of 2015. Prior to this there had been a long period of fairly stable values across the residential sector for most locations. Value levels as at the rating revaluation date of 1 July, 2016 are now 16% greater than the previous market peak during 2007.

“In the residential property market growth has been particularly strong in the entry level end of the market, but solid growth has been seen across most properties, with an average increase of 13.1% over the past three years.

“A continued lack of good properties listed on the market over the past year has resulted in a supply shortage that cannot meet the current demand in the market and this continues to drive values up.”

Mr Gibson says it is important to realise there has been strong value growth in the market since the rating revaluation date of 1 July 2016, but this can’t be included in the new rating valuations. This means in many cases a sale price achieved in the market today is likely to be higher than the new rating valuation.

“Rating valuations are a snapshot in time, fit for purpose valuation designed to assist councils in allocating rates fairly. They are updated every three years to keep up with changes in value over the long term.”

Commercial and industrial property value movements have been less consistent over the past three years since the last rating revaluation. Well-tenanted, located and good quality properties continue to attract strong interest and value increases when offered to the market for sale. Those properties that are not as well located have seen little change in value and in some cases negative growth.

In general there has been positive activity for business-use properties in the district. Greater increased values have been observed within the warehouse precinct area, where significant redevelopment of heritage buildings over the past three years has resulted in greater demand for good office, retail and apartment space. This has resulted in a lift in rental levels and values in this location.

In the rural sector, pastoral properties were showing an average increase of 18.9% and dairy an average increase of 10.9% over their 2013 rating valuations. Larger economic pastoral properties were showing the major lift in values compared to smaller uneconomic properties.

Dairy values are 15% lower than the peak of 2014/15 but are still slightly ahead of 2013 market levels.

“Lifestyle properties have caught on to the growth of the residential sector in recent months although some of the more remote localities have not seen significant value changes in value since 2013. The average change for the district is a 7.5% increase to values in this sector of the market.”

The DCC advises that subject to any objections, these new rating valuations will form the basis for rating for the 2017/18 year. Rates bills will not be affected until 1 July 2017. Changes in rating value do not automatically mean your rates will go up or down because of the change.

Council rating valuations are one of the factors which determine how much you pay in rates. The total rates revenue that the DCC requires is set each year through the annual plan process. This total is then shared out across ratepayers using a combination of factors, including the value of your property.

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