Who's won and who's lost? What does it mean when Taupō house values rise by 38 per cent?
Recent news that Taupō residential property values increased by an average of 38 per cent across the district has met with mixed reaction.
Homeowners can celebrate, their big investment just got bigger. Local Harcourts co-owner Mary-Louise Johns says the three-yearly rateable value review was much anticipated and showed a significant increase in rateable values across the Taupō district.
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"It's hard to say if the revaluation figures are about right, the market will determine that."
She says it's important to remember the main reason for the revaluation process is to set the rates.
"The revaluation process is not done to provide values for property owners for marketing or sales. Not all factors are considered in this assessment, for example work carried out that did not require consent, new chattels and redecoration."
Getting on the property ladder just got a little harder for first-home buyers. Mary-Louise says first-home buyers have to contend with a regional house price cap on loaning. For those buying with KiwiSaver and a Welcome Home Loan, the Taupō district is capped at $400,000 and the maximum loan is the house price cap less a 10 per cent deposit. Essentially, buyers are limited to houses priced under $400,000.
Mary-Louise says in a buoyant market, such as in Taupō, the majority of properties are listed using a "no price" marketing strategy such as auction, tender or by negotiation.
"Many sellers and buyers default to the RV as an indicative market value," says Mary-Louise.
She says some investors may use an increase in equity as leverage to buy more investment properties.
"Other investors may be tempted by the significant increase in perceived market value to try the market."
Opteon carried out the valuations for the Taupō District Council using a mass appraisal process. The valuations are a snapshot in time, as at July 1, and do not take into account positive market conditions in the past five months.
Home values in Mangakino shot up by a massive 93 per cent, while Tūrangi and Kinloch home values increased by 59 per cent and 37 per cent respectively.
In non-residential property, lifestyle blocks went up 42 per cent in value, commercial and accommodation properties increased in value by 23 per cent, and industrial property rose 18 per cent. Recent poor returns in farming were reflected with pastoral farms increasing in value by 11 per cent and dairy farms devaluing by 6 per cent.
Home owners should have been sent their updated property valuations by now and can lodge an objection if they disagree with their new valuation.
Winners from the revaluation exercise are the district and regional council, as a big part of the rating calculation is property values. Property owners can expect changes to their rates payments to take effect from July 1, 2020.