GOLDEN RULES

The Hastings Mail - - WHAT’S ON -

A man I know is cel­e­brat­ing the fact his house has been re-val­ued down to the tune of $95,000.

That may not seem to you like an event to make any­one cel­e­brate, and more cu­ri­ously in this case, the owner him­self sought the re­duc­tion in val­u­a­tion.

In the case of the Auck­land man- Gary Os­borne- his west Auck­land home had been val­ued in the lat­est round of coun­cil val­u­a­tions late last year as be­ing worth an eye-wa­ter­ing $895,000, roughly 10 times the me­dian house­hold in­come.

That was a rise of 95 per cent on the coun­cil’s 2014 rat­ings val­u­a­tion, and a rise that was higher than his im­me­di­ate neigh­bours.

As was his right, Os­borne asked for a free re­view of the val­u­a­tion, and pre­sented ev­i­dence that it should be low­ered.

And QV, which did the rat­ings val­u­a­tions, agreed af­ter a visit to the prop­erty that it had been wrong.

The cor­rected val­u­a­tion of

Un­der­stand val­u­a­tions are sub­jec­tive, not ob­jec­tive

Seek to un­der­stand your world Fight your cor­ner

$800,000 was logged onto the sys­tem, made up of land value of $775,000, while the ‘‘value of im­prove­ments’’ (ie the house) was val­ued at a mere $25,000.

In a rapidly-fill­ing city like Auck­land, it is land prices that have risen.

Ex­actly why Os­borne sought the reval­u­a­tion is a story in it­self.

A for­mer real estate agent, and a re­tired man, he was keen on only pay­ing his fair share of the rates.

Rates are divvied up in re­la­tion to the value of peo­ple’s prop­er­ties.

The higher the value of your prop­erty, the big­ger the share of the city’s rates you pay.

That’s not some­thing that usu­ally both­ers Auck­lan­ders.

The game has been to get as much house as pos­si­ble, and glory over the an­nu­ally ris­ing val­u­a­tions.

If any­thing, the pe­ri­odic rat­ings val­u­a­tions are a time to cel­e­bra­tion, not com­mis­er­a­tion, though ris­ing rates are a bur­den that falls es­pe­cially hard on re­tired peo­ple.

The an­nual hike in the rates bill, mas­sive though it has been in re­cent years, has been tiny com­pared to the ex­tra hun­dreds of thou­sands added to home­own­ers’ net wealth as a re­sult of the wildly ap­pre­ci­ated prices of their homes.

Ev­ery­body’s got a view on whether those now-dip­ping prices are sus­tain­able in the long term, and ex­actly what the gov­ern­ment’s Ki­wiBuild, for­eign buyer, and gen­eral eco­nomic poli­cies will do to the mar­ket.

But Os­borne has no plans on sell­ing, so he’s happy with the cut in his val­u­a­tion and rates’ bill, and any­way, the coun­cil val­u­a­tion is only tem­po­rary.

The next coun­cil val­u­a­tion is in a cou­ple of years’ time.

Os­borne also learnt a lot about the val­u­a­tion sys­tem a few years’ ago, when the coun­cil took some of his land for road widen­ing, which was not taken into ac­count when the coun­cil val­u­a­tions were done leav­ing him with lit­tle trust in the val­u­a­tion sys­tem.

It low­ered his trust in what is at best an im­pre­cise art.

How much is it worth off his rates?

Maybe $200-$300 a year, he es­ti­mates.

How much are hon­est folk worth to show us the na­ture of the sys­tems that im­pact our money lives?

Price­less, I reckon.

123RF

Prop­erty val­u­a­tions are not an ex­act sci­ence.

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