Urban values took hit, rural land values held up
Both capital and land values across Wanganui have fallen in the latest property revaluations.
Quotable Value NZ (QV), contracted by the Wanganui District Council to carry out the three-yearly valuation, said capital values had dropped an average of 4.5 per cent and land values an average of 6.2 per cent.
The valuation covered more than 21,000 properties in the district.
These independent valuations are used by local authorities to set their rating base and are not necessarily an accurate indication of the worth of a property.
QV takes relevant property sales to determine a market trend and applies this trend to similar properties in the area to allocate valuations.
The Wanganui council then uses property values to set some rates. Rates that are affected by capital value are roading, stormwater, debt retirement, the central business district and the fire-fighting part of the water rate. Land value affects the general rate.
The bulk of Wanganui's capital value - $6.214 billion - lies in the residential sector and it is the same for land values.
Simon Willocks, QV's Palmerston North manager, told the district council this week that as with any revaluation "there are exceptions" and some properties will have greater of lesser changes to their valuations.
While the urban values have taken a hit, Mr Willocks said most rural land values had held up against 2010.
But in the commercial area he said valuations were generally down between 10-15 per cent.
"The market has responded to the higher risk properties where some values have dropped by up to 30 per cent. This was reflected in those properties recognised as potentially earthquake-prone, but location and type of commercial property were other factors," he said.
On the flip side he said the market had responded "favourably" to quality and well-located buildings, and rentals on quality premises had firmed.
Julian Harkness, council's deputy chief executive, said the drop in valuations means some property owners who bought at the peak of the property cycle in 2007 will find they have no or negative equity in their property. "While it is the market and not the revaluation, that removes property owners' equity, the revaluation can still be an unpopular reminder," Mr Harkness said.
He said that generally those properties whose land or capital value had fallen more than the average will see their rates decrease.
Mayor Annette Main said the latest valuations continued a trend following the nearly 56 per cent increase Wanganui values experienced in 2007, when the property market was at its height.
That valuation was followed by a 6 per cent drop in capital values in 2010 and a further 4.5 per cent drop this year. Average land value has declined by 6.2 per cent in the latest valuation.
Ms Main said the latest data mirrored that collected in other provincial areas and that the decline was not "unexpected".
She said the effect on individual properties will vary.
"In general, property owners whose land or capital value has fallen more than the average will pay a lower share of council costs."
She said the council would be considering the latest revaluations when it worked through its Annual Plan.