Apartments take biggest price hit

By John Cousins


The values of Tauranga's land and apartments have taken the biggest hits over the past three years, according to the city-wide revaluation.

Apartments at Mount Maunganui suffered the biggest drop in value, falling by an average of 15 per cent, compared with 7 per cent for apartments in other parts of the city.

Leaky home fears have also impacted on values. Houses with monolithic claddings associated with weathertight issues sold for an average of 5 per cent less than other houses from the same era.

While residential and apartment land values dropped by an average of between 6 and 9 per cent, the improved value of properties _ the capital value _ saved the day for Tauranga's residential sector.

Capital values for city residential properties remained relatively flat over the past three years, reflecting the lingering impact of the recession on Tauranga's housing market.

Tauranga Mayor Stuart Crosby was upbeat about the revaluation, saying it painted a positive picture. The market had remained pretty stable during a global financial crisis.

Even areas where there had been drops in value were now starting to show signs of improvement.

The revaluation showed that the tough times caused by the credit crunch had hit the apartment sector hardest, even when the value of buildings was taken into account. The capital value of apartments fell city wide by an average of 7 per cent, with drops of at least 15 per cent and 13 per cent at the Mount and Papamoa.

The 2008 global credit crisis burst Tauranga's property bubble. The city's 2009 revaluation wiped out gains made since 2006 and retreated a further 4 per cent. Little has changed since then, with average values for most of the city's 47,000 residential properties mostly retreating by a further 1 or 2 per cent.

The main exceptions to this trend, the suburbs of Bellevue, Maungatapu, and Welcome Bay, indicated how the busiest section of the market since 2009 has been lower-priced properties. Pyes Pa and Bethlehem held steady with no change in overall values, while the blue chip suburb of Matua bucked the trend for the upper end of the market and notched up a 2 per cent rise in values.

And properties where the land itself had a significant value, such as coastal properties, may see bigger drops in value than other residential properties.

The council report said there had generally been small decreases in the value of industrial and commercial properties. However, it noted that ``a number of influences had created some bigger changes in some commercial and industrial properties''.

Residential properties at Greerton, Maungatapu/Welcome Bay and the Mount notched up the biggest range of changes in values, swinging from 10 per cent drops to 5 per cent increases.

Elsewhere, the changes were mostly within a range of 10 per cent, while changes in values for Matua and Tauriko stayed within tight bands of 5 per cent and 3 per cent respectively.

The new values will be used to calculate rates over the next three years. However, because the majority of valuations were relatively flat, the impact on how rates were distributed would be minimal.

The council's rates and land information team leader, Jim Taylor, said that when revaluations were relatively flat the percentage changes were set more by the budgets struck by the council.

If the values do not move much then how the rates were distributed would not change, so the main influence was how much the council increased its rate take.

The council's 10-year plan showed rates were forecast to rise by 2.2 per cent next year. New valuation notices will be sent out to ratepayers from November 14 and objections close on January 11. The revaluation was carried out by independent registered valuers LandMass Technology.

- Bay of Plenty Times

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