New valuation not cash in bank

Tauranga homeowners who are now feeling more wealthy have been warned not to treat the new council property valuations as gospel.
The three-yearly revaluations, being mailed out tomorrow, can be wide of the mark on the final selling price _ both above and below, say real estate experts.
The quality and condition of individual properties and the mood of the market at the time play a vital part in the sale and purchase price, they say.
Eves and Bayleys marketing manager, Gil Beadle, told the Bay of Plenty Times: "The capital valuation (CV) is all over the place. You buy a home on what you like and what suits the family _ and emotion comes into the purchase, not the CV.
"Sure, the [latest] CV may be important for six months but the market moves on and it all comes back to getting an independent registered valuation _ that's what the banks ask for before giving out a loan," he said.
The latest revaluation, conducted by Landmass Technology for Tauranga City Council, showed capital values rose 50 per cent and land values leapt 76 per cent across the city over the three years, ending July 1, 2006.
Mr Beadle said every time the new valuations came out a percentage of sellers harden up on their property value _ and they don't get a buyer.
He said people should use property sales comparisons in the period they are buying or selling _ "there is tons of evidence on that".
Neville Falconer, a Tauranga-based National Real Estate Institute councillor, said the three-yearly statutory revaluation only gave a general indication of the movement in the property market.
"Psychologically, owners may treat the capital valuations seriously but in reality they are not helpful at all. It is a mass revaluation and no weight is placed on the specifics of individual properties.
"There may be an improvement in a property and it could be worth more than the CV, or the property may have deteriorated which is not assessed," Mr Falconer said.
Valuer Roger Hills, of Hills Haden, said some CVs could be spot-on while others would be $100,000 above or $200,000 below market value. He said the CVs were computer-generated valuations mainly for rating purposes on a street-by-street and suburb-by-suburb basis.
Mr Hills said in the latest three-year cycle, house prices peaked in the third quarter of last year and values have eased since then. "It's a mistake to use CVs as anything more than a rough guide."
Mark Grinlinton, a director of Landmass, agreed the revaluation was only a snapshot of the property market.
"Any valuations can be out of date at any time _ there is a three-month lag on information for sales up to July 1 and they have been included. And I don't think the market has moved too much between July 1 and now," Mr Grinlinton said.
Tauranga City, like other councils, updates the property values to make the annual rates more equitable. The CV calculation forms 40 per cent of a rates bill and this portion would not normally rise unless the value of one property has increased well above the average on a percentage basis.
The other portion of the rates bill comprises the fixed Uniform Annual General Charge (29 per cent), water (nearly 17 per cent) and sewerage (14 per cent).