Revealed: 'Wildly out' valuations
Real estate industry experts have labelled the latest residential property revaluations dangerous, with calls for the mass appraisal system to be overhauled or scrapped.
Wide discrepancies have been revealed between new Auckland Council CVs and the actual selling price of some homes, throwing into question the accuracy and relevance of new valuation notices.
They include a four-bedroom Waiheke Island property overlooking Onetangi Beach that sold last week for $2.4 million - nearly three times its new $810,000 valuation.
He warned that council CVs were based on "mass appraisal computer-generated estimates" that were calculated sight unseen by council officials for the purpose of setting rates.
Auckland Council revaluations manager Mindy James defended the system as "fair, equitable and robust".
Valuations were set according to recent sales in relevant geographical areas and took into account any changes to the property since the 2011 revaluations such as consented work, zoning changes and subdivision.
Mr Brader said the council estimates were often wildly out and real estate agents usually considered them irrelevant. But many lay people relied on them as an official figure, particularly new immigrants.
"My personal view is they should come up with a new system because it's just a complete waste of time."
The problem with having seen first hand how Council works I know only too well that their systems are unfair, inequitable and flimsy. It’s ratings department is full of cowboys riding roughshod over reality. The terrain on Waiheke means that neighbouring properties can vary wildly in terms of views, access, and a host of other factors that make them impossible to compare unless sighted and assessed first-hand, something Council staff don’t do, hence the discrepancies noted in the Herald article.
Brown himself has driven up land values with his Unitary Plan based on an ‘up not out’ philosophy that constrains land supply. This in turn has caused property speculation as explained in another Herald article.
Expectation is a powerful thing. It's the reason 45,000 sections in Auckland are sitting there ready to go, with all the connections to water, power and roads - but no houses.
The prospect of a repeat of the doubling or tripling of land prices around Auckland in the past 15 years has created a dangerous dynamic for the economy and for first-home buyers in particular.
It means land bankers are more likely to hold on to land expecting to get tax-free capital gains without going through the messy business of building and selling new houses.
The 35 to 40 per cent rise in Auckland land value over the past two years was proof positive that they are sitting on the biggest sure thing in the history of New Zealand investment.