New rating valuations for Southland District
Southland District 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 19,948 properties on behalf of the Southland District Council by Quotable Value (QV). They show the total rateable value for the district is now $25.5 billion (up 10.9%), with the land value of those properties now valued at $17.7 billion (up 9.9%).
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 August 2021, and do not include chattels.
On average, the value of residential housing has increased by 46% since the district’s last rating revaluation in 2018 with the average house value now sitting at $441,000, while the corresponding average land value has increased by 67% for an average of $172,000.
QV’s National Revaluation Manager Tim Gibson commented: “We have seen significant growth in the residential sector since 2018 which has been fuelled by record low interest rates, a shortage of listings, and strong regional migration in addition to a number of ex pats returning.
“The highest percentage growth within the residential market has been observed within the smaller provincial townships of Southland, largely due to their low value base. The larger townships of Winton, Te Anau and Riverton have experienced more moderate value growth in comparison.”
Meanwhile, the commercial and industrial sectors have had moderate increases across the district. Commercial property values increased by 15% and property values in the industrial sector have increased by 21% since the city’s last rating valuation in 2018. Commercial and industrial land values have increased by 38% and 64% respectively.
“This value growth has been driven by moderate rental growth and reduced yields,” Mr Gibson said. “The exception to this is Te Anau’s commercial sector, which has not seen this amount of growth due to investor uncertainty caused by COVID-19.”
Residential housing value changes since 2018 revaluation levels:
Since 2018, the average capital value of an improved lifestyle property has increased by 37% to $551,000, while the corresponding land value for a lifestyle property increased by 51% to $267,000.
Mr Gibson said the strength of the lifestyle market typically aligned with high-end residential properties.
“Good demand for established lifestyle sections was evident in the traditional Woodlands to Winton localities due to their proximity to Invercargill. With a shortage of lifestyle blocks available and good demand, areas fringe of this are now more desirable and have observed good growth accordingly throughout the district,” he said.
The large rural sector in Southland District has seen no to moderate growth depending upon the landuse type. Dairy properties within Southland District have, on average, seen a very slight reduction in capital value of -0.2% and -0.2% in land values. Uncertainty remains within the dairy sector, with value levels generally at 2018 levels.
Pastoral properties were on average showing a 4.4% increase in capital value and a 3.7% increase in land values. Within the rural sector, forestry was showing the largest increase with 35.6% increase to capital values and 37.2% increase to land values.
Meanwhile, demand within the lifestyle sector has driven up value growth on smaller, well located pastoral units within the lifestyle sector.
Capital & Land Value Changes by Category:
It is helpful to remember the effective rating revaluation date of 1 August 2021 has passed and any changes in the market since then will not be included in the new rating valuations. This often means a sale price achieved in the market today may be different to the new rating valuation set as at 1 August 2021 – particularly in a fast moving market like Southland has experienced over the past 12 months or more.
Southland District Council will use the new values as the base for setting rates from 1 July 2022. SDC chief financial officer Anne Robson said council staff were now reviewing the values to assess the impact on rates.
“It is important to realise that changes to values does not increase or decrease the total rates revenue for the council,” she said. “Instead, rates will be spread amongst ratepayers in slightly different proportions than before.
“Because residential, lifestyle and forestry capital values have increased at a faster rate than other sectors, these properties will pay a larger share of the total rates than at present when the new values are used as the base for the rates calculations.”
Decisions about proposed rates from 1 July 2022 will be considered by Council during the development of its Annual Plan 2022/2023.
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 16 February 2022. If owners do not agree with their rating valuation, they have a right to object through the objection process before 24 March 2022. More information about the objection process is available online at www.ratingvalues.co.nz.
Find out more about the rating revaluation and objection process.