New rating valuations reflect buoyant Wairarapa property market
Wairarapa property owners will soon receive a 2020 Notice of Rating Valuation in the post with an updated rating value for their property.
The new rating valuations have been prepared for all Wairarapa properties on behalf of Masterton, Carterton and South Wairarapa District Councils by Quotable Value (QV).
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 2020, and do not include chattels.
The new valuations show the total rateable value is $8,930,308,000 in Masterton, $3,733,940,000 in Carterton, and $6,368,201,000 in South Wairarapa.
The average value of a residential house in Masterton has increased by 47.3% to $498,291. In Carterton, it has grown by 37.3% to $523,149, while the average value of a residential house in South Wairarapa is now $631,357, an increase of 40.4% over the last three years.
The corresponding land values have increased 65.8% in both Masterton and Carterton, with an increase of 58.4% in South Wairarapa.
QV Area Manager Paul McCorry commented: “The residential market has been strong across the Wairarapa over the last three years – and the appeal of the region has only grown since the Covid-19 pandemic, with businesses adopting more flexible working practices and encouraging staff to work from home.”
He said the most affordable areas had seen the greatest increase. For instance, values in Featherston have increased by 51.9% to an average value of $482,498, with the corresponding land values up 69.2%.
“Another trend we have seen is a number of Wellington buyers looking over the hill both for more affordable property, but also in search of the semi-rural lifestyle,” Mr McCorry added.
“There is high demand throughout the region for development land and new homes in residential subdivisions are typically snapped up off-plan as soon as they come on line. Record low interest rates, low stock and a changing attitude to needing to be close to the office are all factors creating upward pressure on the local housing market.”
He said it was critical to remember that the new values are not a market valuation and only consider the market up to 1 September 2020. “The housing market has continued to be extremely buoyant in the Wairarapa since that date, with our research indicating values have increased up to 10% over the last three months. As such, the new values will not account for the huge uplift we saw towards the end of 2020 and into January 2021.”
Meanwhile, commercial property values have increased by 25.1% in Masterton, 12.8% in Carterton and 32.7% in South Wairarapa. The industrial market also saw significant increases of between 30 and 40% in these districts.
“The industrial market nationally has been a really solid performer over the last three years and the results of the revaluation show this is no different in the Wairarapa,” said Mr McCorry. “The commercial market, on the other hand, faces some additional headwinds – particularly that of earthquake strengthening costs, and this has somewhat provided a handbrake to value increases, especially in Carterton.
“Similar to residential development land, we have seen strong demand for commercial and industrial zoned land. An interesting shift over the last three years has been demand for commercial and industrial land close to the urban centres in each town for residential townhouse and apartment development.”
Commercially zoned land has increased 36.4% in Masterton, 83.5% in Carterton, and 61.3% in South Wairarapa. Industrial land is up 44.2% from 2017 levels in Masterton, up 58.7% in Carterton, and 68.25% in South Wairarapa.
Since 2017, the average capital value of an improved lifestyle property has increased by 38.4% to $866,026 in Masterton, while the corresponding land value for a lifestyle property increased by 61.5% to $395,926.
Increases in Carterton have been similar, with the average improved lifestyle block now valued at $839,209, up 34.0%, and a land value of 363,605, up 55.9% from 2017.
Lifestyle values are slightly higher in South Wairarapa, with an average value of $1,012,284 and an average land value of $455,022. It has seen similar increases to its Wairarapa neighbours, up 38.1% and 54.5% respectively.
Rural capital values are up 10-15% in both South Wairarapa and Carterton, whereas Masterton has seen significantly more growth at 33.2%.
It is helpful to remember the effective rating revaluation date of 1 September 2020 has passed and any changes in the market since then will not be included in the new rating valuations.
This means in many cases a sale price achieved in the market today may be different to the new rating valuation set as at 1 September 2020 and that rating valuations are not designed to be used as market valuations for raising finance with banks or as insurance valuations.
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.
New rating values will be posted to property owners after 10 February 2021. If owners do not agree with their rating valuation, they have a right to object through the objection process before 19 March 2021.