‘1st time in 4 years’!
New Government Valuations released in December.
Government Valuations (G.V.’s) are released on a normal 3 yearly cycle, with the last computer-based mass appraisal completed having an effective date of 1st July 2017. Over 4 years ago.
Last year the Valuer General would have normally completed and posted the new 3 yearly G.V.’s for all rateable properties in New Zealand, effective 1st July 2020.
With the onset of Covid-19 and the lockdown periods last year, it was decided to delay the new valuations to have an effective date of 1st June this year, thereby extending the cycle to four years since the last one.
Then came the latest lock-down to spoil the party! The Valuer General has again deferred the release to the public in December. It will have an effective date of 1st June 2021.
How are G.V.’s assessed?
Government Valuations are completed in order to help assess and compute the annual rates for properties throughout New Zealand. The Valuation process is one that is now completed on a “mass appraisal” computer-generated system. They are not intended to provide an accurate guide as to the current market value of the property, moreover for rating purposes. Years ago a friendly Government valuer would inspect each property once every 3 years and maintain records of changes. Unfortunately, resources do not stretch enough to allow this to happen anymore, so it is completed by computer. There are still provisions for G.V.’s to be objected to and scope to provide new plans recording alterations, additions, etc.
G.V.’s versus Market Value. A Conundrum for Sellers & Buyers
There is a common misconception by prospective purchasers, whom often rely on the G.V. thinking this is the market value or an accurate guide. Sadly this can lead to error, as they do understand what G.V.’s are actually complete for.
Some new entrant websites have online valuation estimates calculators, asking “What is my home worth “? Whilst the volume of data collection is much more robust today and more readily available in quick fashion, these calculators nearly always fall back to the G.V. as the baseline algorithm, then changes up or down reflecting general movement recorded by various economic parameters, suburb statistical data, etc. Banks are also placing heavier reliance on these websites for lower risk lending. Due to the delay in the latest G.V.’s, some of these website value estimates are throwing up very wide ranges, one I referenced in Chatswood recently at over $700,000. Wow, that’s confusing to prospective buyers trying desperately to work out what they are prepared to bid at an Auction!
An Easier Way Ahead
As of 1st December, these websites will use the new Government Valuation figures and we hope will provide more accuracy, as they discard the old GV’s.
A more accurate gauge on a property’s current market value is to look at fresh sales evidence for comparable properties in a similar location and of a similar property type and size. There are a number of factors that make up value for residential property and it is always recommended to either employ the services of an independent Registered Valuer or alternative a knowledgeable and highly experienced, real estate agent whom is a recognised specialist in that area.
Here at Lochore’s, we are always busy when fresh new G.V.’s come out as it often stimulates “what is my home or investment property now worth” questions.
We are happy to assist should you be curious on your market value. Under current alert levels, we are happy to complete online value assessments for clients who may be thinking of selling in the next 6 months.
If you have any questions regarding the Government Valuation process or wish to get in touch, please don’t hesitate to call 09 481 0639 or email – firstname.lastname@example.org.
Blog writen by CHRIS GEMMELL, AREINZ
Licensed Agent Registered Valuer (non-practising)