10 March, 2014

Christchurch City rating value rises

Christchurch City Council’s first post-quake property revaluation indicates the city’s total Rating Value has risen from $75 billion to $84 billion.

The revaluation carried out by independent valuer Quotable Value (QV) shows residential properties have risen 16.2 per cent, compared with an approximate nine per cent rise for commercial and rural properties.

Council Finance Committee chairman Raf Manji says the new values will take effect for city and Banks Peninsula properties from 1 July 2014, but this does not mean the Council will automatically collect more in rates.

“The total amount of rates collected each year is set in the Council’s Annual Plan. Rating Values are used to work out how much is collected from each ratepayer.

“It’s important to realise that if the Rating Value of your property rises or falls, your rates won’t necessarily follow suit. Your rates bill is based on the value of your property in relation to the value of all other properties city-wide.

Based on the recent revaluation, the average house in Christchurch has a Rating Value of $455,000. With the 6.5% rates rise, this property will pay $2076 in rates.

This means the average residential property will pay an extra $2.83 per week in rates.

“Changes in Rating Values vary widely across the city and there are several reasons for this, Mr Manji says.

“The creation of the residential Red Zone, coupled with extensive demolitions in the Central City, pushed down the overall Rating Value of those areas.

“Because of the earthquakes, we’ve had a six year gap between revaluations instead of the usual three years. The last revaluation in 2007 also occurred when the property market was at its peak. In the case of Banks Peninsula, where there are a high proportion of holiday homes, demand for these properties fell after the global financial crisis, and this led to a drop in values.”

The Government approved a special methodology for the revaluation that excludes earthquake damage.

But QV Southern Operations Manager Brendon Bodger says although the new valuations cannot take into account any physical earthquake damage, they do reflect the market reaction to the earthquakes.

“Most residential property values have increased from the previous peak of the market in 2007, with almost 80 per cent experiencing a rise of 10 per cent or more. This is the result of strong demand for housing fuelled by the influx of workers into the city and the relocation of approximately 7,000 red zoned properties.”

Other key trends:
• Residential values have tended to drop for bare TC3 land where site specific foundations are required. For properties with existing houses, TC categories had little impact on Rating Values.
• Commercial land values have generally fallen sharply in the inner part of the Central City (as much as 50 per cent) and increased in outer areas of the CBD suitable for office accommodation. Values have risen strongly in suburban commercial areas (in some cases by more than 40 per cent).
• Rural values have gone down slightly, but some areas with development potential close to the city have risen.
• The average rise for more affordable homes has tended to be greater than for more expensive homes, reflecting demand for these types of properties.
• Average values have fallen slightly across Banks Peninsula.

Background:
• The Government-approved valuation method was adopted because it was not practical to physically inspect more than 160,000 city properties.
• New Rating Valuations will be publicly released on 12 March.
• Ratepayers have six weeks to lodge an objection to their new Rating Revaluation with QV. If dissatisfied with the outcome, they have the option of filing a further objection with the Land Valuation Tribunal.
• Earthquake damage is not grounds for objection.

For further information and a list of FAQs on the revaluation: www.ccc.govt.nz/revaluation

Glossary of terms:
Rating Value (often referred to as Capital Value and previously referred to as Government Value or GV ) is an assessment of the likely price paid for a property had it been sold on 1 November 2013. Rating Value is used to determine how much individual property owners pay in rates each year. A market valuation involves a detailed property inspection and is usually done for mortgage purposes or when a property is sold.

Quotable Value is an independent valuer contracted by the Christchurch City Council to assess the Rating Value of all city properties. QV’s work is audited by the Office of the Valuer General who oversees local authority property revaluations nationally.

ENDS

© Scoop Media