Cap­i­tal val­u­a­tion rel­e­vance de­bated

Otago Daily Times - - BUSINESS & MONEY - Si­mon.hart­[email protected]

Mr Stevens asked ‘‘Who can say they had a val­uer knock on their door last week . . . in the last few decades?’’.

Mr Nagel said QV used a com­bi­na­tion of prop­erty in­spec­tions, when re­quested by the prop­erty owner to re­assess a value, plus com­puter al­go­rithms to as­sist with the as­sess­ment.

The sys­tem called Mass Ap­praisal was an in­ter­na­tion­ally ac­cepted ap­proach for rat­ing as­sess­ment, he said.

Metro’s Mr Stevens said re­cent sales of two iden­ti­cal, neigh­bour­ing prop­er­ties in a coastal Dunedin sub­urb showed they shared the same CV, al­though one was re­de­vel­oped in­side and the other was still in­ter­nally in near­orig­i­nal 1940s con­di­tion.

‘‘The [ac­tual sale price] dif­fer­ence was at least 30%.’’

His­tor­i­cal house sale data of one sub­urb might sug­gest an over­all 20% gain, which was then ap­plied by QV sub­urb­wide, with­out any vis­its tak­ing place.

While en­cour­ag­ing sell­ers to get a val­u­a­tion, Mr Stevens con­ceded few were be­ing done at present by prospec­tive buy­ers as the time lag could see them miss out on be­ing able to make an of­fer.

Har­courts Dunedin man­ager and auc­tion­eer Richard Stringer said when CVs were last set in July 2016, Dunedin’s me­dian dwelling value was $323,000.

It was now $430,500 — a 33% lift in me­dian value since 2016.

‘‘So it makes sense that CVs could be well be­hind to­day’s mar­ket value,’’ he said.

Dunedin re­gional spokes­woman for the Real Es­tate In­sti­tute of New Zealand Liz Nidd said she was ‘‘of­ten sur­prised’’ when ap­prais­ing a house, which then went on to sell well above CV.

‘‘I’ve seen plenty of peo­ple pleas­antly sur­prised by the [even­tual] sales price,’’ she said.

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