Highs and lows of house prices

Homeowners start long process to challenge their valuations. Dileepa Fonseka reports.

COUNCIL valuers will be wading through objections well into next year from property owners concerned at the impact of valuations on property prices and rates.

Tomorrow, owners of 549,000 Auckland properties will start receiving their updated rateable valuations (RVs). Other local authorities, including Coromandel, Kaipara, Napier, Stratford, Tararua, Masterton, Timaru and Clutha will send out theirs in the coming weeks.

Homeowners have around six weeks to lodge an appeal – but the process can be slow and some experts warn the gains often don’t justify the costs.

Waikato, Ruapehu, Rangitikei, Carterton, South Wairarapa, Kapiti Coast, Marlborough, Westland, Waitaki, Mackenzie, Queenstown Lakes and Invercargill councils have already sent out updated RVs to residents.

Already, homeowners in New Zealand’s most expensive town, Queenstown, have filed 550 objections. Anecdotally, many are demanding their properties be reassessed at lower values.

But further north in Mackenzie District, 51 residents have challenged their valuations – and most argue their valuations should be higher, the council says.

This goes to the heart of the conundrum: some homeowners revel in high valuations, in the hope they can use it to leverage up the asking price when it comes time to sell. But for others, lower valuations mean lower rates bills.

Auckland has seen that mood change over the past few years. In 2011, nearly 8000 owners argued their houses should be valued higher. But of 10,186 objections filed in Auckland at the 2014 revaluations, 62 per cent sought a decrease in value. Nearly half were successful.

One of those was Nira Bottinga – but the process was so expensive and protracted that she is not looking forward to going through it again.

The solo mumhas lived in her Blockhouse Bay property since 1988. Every three years – 2008, 2011 and 2014 – she has filed objections. On the first occasion the Auckland City Council accepted her arguments; but since the advent of the super-city, she has had to fight it.

That is what homeowners may face this year: if the council’s valuer does not agree with a valuation, the dispute is sent to the Land Valuation Tribunal where a panel of one judge and two registered valuers make a call.

Most councils’ rating revaluations are contracted out to valuations companies QV or Opteon. And as QV spokeswoman Andrea Rush explains, most valuations are arrived at using computer models and algorithms approved by the Valuer-General. It’s not possible to visit every house in the country.

So if residents have, for instance, renovated their home, they should let the valuers know.

Bottinga’s objection to her 2014 valuation took three years to resolve; in August this year the Land Valuation Tribunal agreed to downgrade her property’s RV from $620,000 to $570,000.

It’s a decision she says reduces her rates bill by $200. ‘‘$200 is a big difference for me.’’

Other neighbours received $800 rates reductions after she persuaded them to go through the process.