Wellington property valuations ‘out of whack’, real estate agent says

Property prices in Wellington have been inconsistent with RVs for some time. File photo / Mark Mitchell

• Wellington’s new rateable valuations were due to be released this month, but have now been delayed to February.
• More market data is needed before the RVs can be verified, Wellington City Council says.
• One real estate agent says land values are overinflated in the capital.

A real estate agent whose elderly client is paying rates on a “bit of dirt” with a rateable valuation of $2 million but an actual value closer to $600,000 believes Wellington’s RVs need to better match the market.

Revaluations of all properties across the city were due to be released this month, but Wellington City Council has now delayed the release until February due to “complexities” with determining values in areas with limited market data.

Sotheby’s Realty agent Mike Lovell said the issue with Wellington was that “everything’s so out of whack”.

OneRoof previously reported properties in the capital have been consistently selling for well under RV (rateable valuation), with many suburbs showing a 20% drop in value.

Lovell said the council would need a bit more time to gather market data before releasing RVs.

“We’re still seeing buyers sort of dancing either side of [the RV] ... it’s not consistent,” he said.

The land value in Wellington is overinflated, one real estate agent said. Photo / Mark Mitchell

He said the delay in releasing the RVs was probably good for home buyers and sellers, as the market needed to “find its rhythm”.

Lovell thought a rateable valuations drop “probably should happen” as there were many RVs that were not reflective of value in most parts of the city.

“Or you’ve got inflated land values,” he said, noting he had an 80-year-old client with a piece of land attached to his property with a separate title, with an RV of $2m.

“We valued it and said it’s probably $600-700,000 as a section to sell.”

He said his client was “paying rates on a bit of dirt that’s probably not even worth $650,000″.

Meanwhile, other clients had properties with “massive land values”, including one person with an Oriental Bay property with an RV of $9m, with the house itself valued at $1.8m.

Tommy’s Real Estate chief executive Ben Castle was unconcerned about the delay in RVs being released, saying they made little difference and were a “revenue grab” for the council.

“In the nicest sort of way, they are just a tax,” he said. “It’s just another number.”

If the council were to release RVs significantly higher than the current valuations “there would be a hell of a lot of opposition coming through”, he said, but raised RVs were not out of the question because they needed to take into account if property values were likely to increase over the next three years.

“If they were to go down I would be surprised because of the three-year prediction they need to make on value.”

Melissa Nightingale is a Wellington-based reporter who covers crime, justice and news in the capital. She joined the Herald in 2016 and has worked as a journalist for 10 years.