Property market

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Shocking Drop in Wellington Property Values: Latest Valuations Show 24.4% Plunge!

Wellington City’s new rateable valuations reveal a startling 24.4% drop in house values since 2021. This significant decline has affected every suburb, with capital values falling between 12.1% and 29.3%. The average house value in Wellington now stands at $1.08 million.

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This dramatic decrease is in stark contrast to Auckland’s valuations, which are expected to show little change from 2021 and won’t be released until May at the earliest.

Property owners in Wellington will soon receive their new rating valuations via post or email, and they will be available on Wellington City Council’s online property search and the QV website tomorrow.

David Nagel, chief operating officer at Quotable Value, emphasized that rating valuations are merely snapshots of the market at a specific point in time. “When these were last set in 2021, the market was rising quickly, buoyed by record low interest rates. However, steep declines followed in 2022 due to higher interest rates, tighter credit conditions, higher inflation, and unemployment,” he explained.

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Nagel noted that the latest rating valuations for Wellington City reflect a market still affected by strong economic headwinds. “Sales volumes have reduced, and the market sentiment has shifted from being a sellers’ market to a buyers’ one,” he added.

Commercial property values in Wellington have also decreased by an average of 21%. Michael Nyamudeza, Wellington City Council’s financial operations manager, clarified that changes in rating valuations do not mean rates bills will change by the same percentage. “The council’s budget remains the same, and the proportionate change in a property will determine how the budget is allocated,” he said.

The updated rating valuations are not intended to be used as market valuations. “Ratepayers who have concerns and want to sell their house should approach property valuers rather than relying solely on the rating evaluations,” Nyamudeza advised.

Owners who disagree with their rating valuation can submit an objection by the end of March.

The revaluations of 82,591 properties across Wellington were initially due for release in December but were delayed until February due to complexities in determining values in areas with limited market data.

Mike Lovell, a Sotheby’s Realty agent, highlighted that Wellington’s property market has been “out of whack.” OneRoof previously reported that properties in the capital have been consistently selling for well under their rateable valuation (RV), with many suburbs showing a 20% drop in value.

Lovell believes a rateable valuation drop “probably should happen” as many RVs do not reflect the true value in most parts of the city. He cited an example of an 80-year-old client with a piece of land attached to his property with a separate title and an RV of $2 million. “We valued it at probably $600,000 to $700,000 as a section to sell,” he said, adding that his client was “paying rates on a bit of dirt that’s probably not even worth $650,000.”

Tommy’s Real Estate chief executive Ben Castle previously stated that he was unconcerned about the delay in releasing RVs, describing them as a “revenue grab” for the council. “In the nicest sort of way, they are just a tax. It’s just another number,” he commented.

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SOURCE: NZHERALD