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News: NZ: Dunedin property values soar

Tue, 23 Oct 07

Newly-released valuations for a Dunedin property market worth almost $20 billion show those least likely to afford them will be most likely to be hit by resulting rates increases, reports the Otaga Daily Times...

The average increase for residential properties since 2004 is 36%, reflecting movement in the market in that period, well below the 89% hike announced three years ago.

But Dunedin City Council financial controller Les Weir said yesterday the average rating value had more than doubled in the past six years.

Valuations released yesterday by Quotable Value New Zealand show above-average increases in some of the city's more modest suburbs and outlying areas, with Corstorphine's increase at 47%; Port Chalmers at 49%; Ravensbourne and West Harbour at 51% and Strath Taieri recording the biggest increase, 66%.

Big impact for ratepayers

While the valuation increases are substantial and Mr Weir said yesterday they would "have an impact" on rates in those suburbs he said the increases from the valuation for properties that had risen by 40% to 50% would be no more than about $20 to $30 a year. "It is expected that the impact on rate accounts for the largest group of ratepayers, residential ratepayers and commercial/ industrial will be negligible."

Properties that record the average increase would not receive a rates increase from the valuation, but those above average could, while those below average could benefit from a decrease. The entire increase in rates, however, would depend on the decisions made by the newly-elected council, in terms of what projects it decided to go ahead with.

Mr Weir yesterday released information from Quotable Value, which is required under the Rating Valuations Act 1998 to revalue properties every three years. The revised values are from July 1 this year, but will not be taken into account for rating purposes until July 1, 2008.

Land values increasing

The report shows Dunedin's 53,533 properties are now worth $19.9 billion, with a 34% increase in capital value, and a 49.5% increase in land value since September 1, 2004. The average property in Dunedin was worth $291,000, compared with a 2004 value of $212,700.

"Land values have generally increased at a higher percentage than improved properties. The greatest value increases for houses is generally for those properties in the lower price brackets," Mr Weir said in the report.

He told the Otago Daily Times yesterday the higher end of the market and investment properties increased in value first, because buyers had the money to pay inflated prices.

Increases for those areas, like Maori Hill and the central city north, which included properties near the University of Otago, had increased this year by less than the average at 29% and 14% respectively, because they had already been affected by increases in the past.

 "Eventually, the lower-priced homes go up. There's a lot of catch-up."

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