Property values up 10-30pc

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A REPORT prepared for the next ratings revaluations shows Gisborne residential homeowners can expect a valuation increase of at least 20 percent, and the horticultural and pastoral sectors are likely to see increases of about 30 percent.

Contractor Opteon Technologies Ltd, previously Landmass Technology Ltd, presented Future Tairawhiti committee of all councillors with a revaluation review of the region’s 23,500 properties, which shows trends and increases since the last rating revaluation in 2014.

Gisborne District Council, like other local bodies, must revise valuations every three years.

The ratings are supposed to represent the market as at July 1, 2017, and will be audited by the valuer general in late October.

The report said there was a possibility of at least a 20 percent increase in the residential market from strong value movement over the past 12 months.

The increase was slightly less for lifestyle properties at about 16 percent.

Factors effecting residential and lifestyle properties are:

Strong competition from first-home buyers, investors, existing home buyers and new arrivalsIncreasing equity and lower interest ratesThe market is “playing a lot of catch-up in value lost over the last 10 years”.Rents have risen dramatically and there is a significant shortage of suitable rental properties.Building costs are up significantly since 2014.There is a shortage of serviced sections, with the value of land at Sponge Bay increasing by 60 percent.Pastoral sectorThe pastoral sector is described as the strongest performer in the Gisborne district with average increases of about 30 percent. The report attributed the effect on pastoral properties to:

Very high confidence in the sectorLow interest rates leading to farmers expanding, and activity from out-of-town investors and Maori corporationsTight supply and competition for farmsValues returning to 2007 levels.Strong demand from alternative uses of honey and hunting, which has lifted the value of marginal uneconomic pastoral lands.Horticultural and cropping properties could possibly expect a 30 percent increase in value due to:

A lot of demand for suitable land for apples and gold kiwifruitThe high increase in land value has put a ceiling on citrus cropsThe majority of smaller vineyards are worth only the land value; grapes are being slowly phased outThere will be a significant increase in value in coming years as new plantings come into production.The report said commercial and industrial property had increased little from 2014. Overall increases will possibly be about 10 percent.

The market was affected by:

A shortage of well-located industrial space and landThere was good demand for modern and earthquake-compliant buildingsRents remain staticOlder and earthquake-damaged buildings which need strengthening are heavily discounted.The report said there was possibly a 10 percent increase in the forestry property market. The market was affected by:

An inability to compete with the pastoral and manuka marketThere was strong demand for mature blocks with scale, particularly from overseas investorsCarbon prices had risen significantly since the last revaluation from $5 to $17 per tonne.Strong log prices have miminal impact on land values as most of the value is in the trees.The report said there was likely to be further changes in percentage movements as more sales analysis was completed.