New rating valuations for Chatham Islands
Chatham Islands property owners will soon receive a Notice of Rating Valuation in the post with an updated rating value for their property.
The new rating valuations have been prepared for 639 properties on behalf of the Chatham Islands by Quotable Value (QV). They show the total rateable value for the Islands is now $248,927,000 with the land value of those properties now valued at $98,009,250.
Rating valuations are usually carried out on all New Zealand properties every three years to help local councils set rates for the following three-year period. They reflect the likely selling price of a property at the effective revaluation date, which was 1 September 2021, and do not include chattels.
On average, the value of residential housing has increased by 33.6% since 2018 with the average house value now sitting at $322,000, while the corresponding average land value has increased by 36.5% for an average of $74,500.
QV Senior Consultant David Paterson commented: “The Chatham Island market is different from any other market in New Zealand. Properties are rarely advertised and in most cases no land agent is involved. Most transfers happen through word of mouth with prices agreed without professional input. When properties are put to the market, they generally sell very well.
“But just like the rest of the country, we have seen significant growth in the residential sector since 2018, which has been fuelled by record low interest rates, few listings, and the high cost of building materials for new housing. The majority of the value increase has stemmed from a lack of available housing.”
Meanwhile, the commercial and industrial sectors have had moderate increases across the islands. Commercial property values increased by 14% and property values in the industrial sector have also increased by 14% since the island’s last rating valuation in 2018. Commercial and industrial land values have both increased by 28%.
The Chatham Islands has an economy centred on fishing, tourism and farming. Most of the commercial sector relates to accommodation for the tourism sector and this has benefited from a surge of local tourism from the mainland while the international borders have been closed.
Since 2018, the average capital value of an improved lifestyle property has increased by 11.5% to $218,000 while the corresponding land value for a lifestyle property increased by 17% to $102,000.
Mr Paterson said the lifestyle market typically aligned with residential properties. However, there has been very little activity in the improved lifestyle market over the last three years and lifestyle property changes have been aligned with changes in the residential market.
The smaller rural sector on the island is all pastoral properties. The sector has seen a small amount of growth with capital values up 3.1% while land values have increased by 3.9%. This growth is mainly in the very low value areas, reflecting conservation rather than farming values.
The rural market is even more insular than the residential market. Transfers are generally between family members with very few recorded to “off island parties” over many years.
It is helpful to remember the effective rating revaluation date of 1 September 2021 has passed, and any changes in the market since then will not be included in the new rating valuations. This means that, in many cases, a sale price achieved in the market today may be different to the new rating valuation set as at 1 September 2021.
The updated rating valuations are independently audited by the Office of the Valuer General and need to meet rigorous quality standards before the new rating valuations are certified. They are not intended to be used as market valuations for raising finance with banks or as insurance valuations.
New rating values will be posted to property owners after 23 March 2022. If owners do not agree with their rating valuation, they have a right to object through the objection process before 28 April 2022.
Photo credit: Ville Miettinen from Helsinki, Finland - View from our cottage, CC BY 2.0.
