Taupo property values take off

By LAURILEE McMICHAEL in Taupo
House and land values in Taupo continue to soar as the demand pushes prices ever higher.

Although values have begun to steady in some areas, local real estate agents expect prices for waterfront and other sought-after properties to continue rising.

The annual revaluation of the Taupo district by Quotable Value Ltd shows that the total capital value of the district at July 1 is now just under $10 billion, an increase of 26 percent on 2003.

Land value has jumped even more sharply, increasing by 42 percent to reach just over $5 billion.

In the residential market, increases were even greater.

Quotable Value's senior valuer Michael Power attributed the jumps to strong demand for Taupo homes last year.

Several prime lakefront sites have had apartment complexes developed and values in Taupo's smaller townships have also risen.

Turangi and Mangakino both recorded large land value increases, with land in Mangakino increasing five-fold in value. However, Mr Power said both townships had previously had very low values in comparison with Taupo and lakeshore settlements.

The average Taupo district home now has a capital value of $323,000 and the average section value is $173,000.

Figures supplied by Bayleys Real Estate in Taupo show that median house sale prices in Taupo rose from $189,000 in December 2002 to $305,000 in August 2004.

Although the number of house sales in Taupo last August was down on August 2003, Bayleys sales consultant Gary Harwood said the market had picked up again recently. Taupo's growth had not been due to a property "bubble" that would eventually burst, he said.

"The rises we've had have been well supported by economic growth throughout the country, strong employment, good job security ... we'll retain those gains and when we get the next cycle it'll take off again.

"[But] properties on the waterfront or close to it will continue to have strong demand and growth in prices."

Harveys Real Estate director Tony Hay said the latest valuations backed up his company's own figures, which showed a 34 percent increase in residential capital values.

But part of the reason for the "huge" valuation increases was because Taupo had only recently switched from three-yearly to annual valuations and those had taken some time to catch up with the market.

His company had seen three years of strong market growth and although prices had flattened recently, he had never known Taupo prices to slip. "I've been in this market for 20 years through crashes and recessions and God knows what.

"I don't think I've ever seen the prices go back."

Taupo District Council management accountant Norman Jones said the district's rates were based on land values.

Property valuations which increased in line with the average land value increase would not be charged more rates.

Only properties whose land value had an increase well above the average would have increased rates.

Property owners will receive new valuation notices this week.