Property Brokers
A question we are often asked “are properties selling above or below their RV (rateable value)?” Technically yes, 86% of residential properties sold in Central Hawke’s Bay in 2019 sold above their RV, 3% sold at RV and 10% below RV, equating to an overall average 16% or $51,000 over RV. However, while medians and averages give a good guide on property trends, to give a more accurate answer would be to look more specifically at statistics from similar properties comparable to that particular home. The same could be said for average days on market and sale price. A RV is the ‘value’ of a property set by a local authority (Council) for the purpose of determining and allocating rates. Previously known as a government valuation (GV), the RV is the value of a property at one given date and is based on properties that sold around that date. To calculate rateable value, Councils undertake a mass appraisal valuation exercise (meaning valuers don’t view and assess every single property) comparing recent sales in an area to the property being valued. They also hold information for each individual property such as property type, location and land size, zoning, floor area, consented work (such as renovations), and many other factors. However it is important to remember Council are very clear that the revaluation process is not done to provide values for property owners - for marketing, sales or any other purposes. It is done primarily for rating purposes and Councils are required to do this by law. And because not all factors are considered - for example, work carried out that didn’t require a consent, redecoration, chattels and changeable market factors - the rateable value is not the best way to calculate what a home will sell for in the open market. Rateable values were reset in Central Hawke’s Bay in September 2018 with Central Hawke’s Bay experiencing some of the greatest growth in property values in New Zealand since the last revaluation undertaken three years prior. So while purchasers do question the RV of a property, a more reliable assessment should be undertaken on current market conditions, recent comparable sales and comparable properties currently on the market as RV’s are not a reliable reflection of a property’s current market value.
‘Proud to be here, proud to work for you’ says it all.
Thinking Real Estate, call the number one Team.