Source: Quotable Value
Dunedin City property owners will soon receive a Notice of Rating Valuation in the post with an updated rating value for their property.
The new rating valuations have been prepared for 56,456 properties on behalf of the Dunedin City Council by Quotable Value (QV). Their careful analysis shows the total rateable value for the district is now $47.7 billion, with the land value of those properties now valued at $25.6 billion.
On average, the value of residential housing has increased by 38% since 2019, with the average house value now sitting at $672,000. At the same time, the corresponding average land value has increased by 71.5% to a new average of $363,000.
QV National Revaluation Manager Tim Gibson commented: “Dunedin has seen significant residential growth over the last three years which was primarily driven by record low interest rates.
“Significant planning changes have occurred since 2019. While the 2GP was largely operative last revision, Variation 2 – Additional Housing Capacity was notified in February 2021 and has added further stimulus for some suburbs due to potential rezoning.
“Although some of that growth has fallen away throughout 2022 and into 2023, values are still well above where they were at the previous rating valuation in 2019.”
Meanwhile commercial and industrial property capital values are showing average increases of 30.3% and 52% respectively since QV’s last revaluation in 2019. During the same period, land values have increased by an average of 63.6% for commercial and 97.2% for industrial compared to their 2019 Land values.
“This growth is especially significant within the industrial sector, with a shortage of industrial land keeping upward pressure on value levels. Commercial value growth has been driven by fringe central George Street areas and suburban shopping centres with significant land value movement underpinning this growth,” Mr Gibson said.
Mixed use zones have been in demand, with the influence of apartment multi complex residential use mixed with retail or office space typically to the ground floor. Moderate value growth has also been observed within more central George Street, which has been driven by hardening yields but limited rental growth in the retail sector.
The latest data shows that the rural sector has observed more moderate value change with dairy capital values increasing by 7% and pastoral by 30%. The higher pastoral increase is influenced by a larger increase in hill country values, underpinned by the demand for forestry land.
Since 2019, the average capital value of an improved lifestyle property has increased by 50% to $1,240,000, while the corresponding land value for a lifestyle property increased by 70.3% to $612,000. “The lifestyle market has had strong growth in line with the residential sector,” Mr Gibson added.
What are rating valuations?
Rating valuations are usually carried out on all New Zealand properties every three years to help local councils set rates for the following three-year period. They reflect the likely selling price of a property at the effective revaluation date, which was 1 July 2022, and do not include chattels.
It is helpful to remember that any changes in the market since that time will not be included in the new rating valuations. Often this means that a sale price achieved in the market today will be different to the new rating valuation set at 1 July 2022.
Subject to any objections, Dunedin City Council will use the new rating valuations for rating for the 2023/24 year. That means rates bills won’t be affected until 1 July 2023. Chief Financial Officer Gavin Logie said it was important that property owners remember that changes in rating value do not automatically mean your rates will go up or down.
“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.”
The updated rating valuations are independently audited by the Office of the Valuer General and need to meet rigorous quality standards before the new rating valuations are certified. They are not intended to be used as market valuations for raising finance with banks or as insurance valuations.
New rating values will soon be posted to property owners. If owners do not agree with their rating valuation, they have a right to object through the objection process before 16 March 2023.
