Quake issues may cut property values
Central Nelson commercial property owners could see a reduction in asset values from three years ago as earthquake prone issues come into play, Quotable Value's southern revaluation manager Gail Smits says.
She and QV's Nelson manager Richard Kolff have briefed the city council on the provisional, unaudited results of the 2012 Nelson revaluation.
QV is employed by the council to do the revaluations on a three-yearly basis. The 2012 figures would come into effect on November 10, Ms Smits said. The process helped to determine what proportion of rates owners should pay.
Ms Smits said Nelson was like other regions in that a "lot of new issues", such as the Canterbury earthquakes, would have a bearing on the outcome of revaluations.
Fairfax Media reported this week that homeowners in Wellington could be left facing bigger rates bills as earthquake strengthening costs hit commercial property values.
Many commercial buildings in Wellington will have their values cut by more than 20 per cent in the latest round of rating valuations. It was one of many consequences of the Christchurch earthquakes that were having to be tackled by councils across the country.
Ms Smits said Nelson city had been proactive in identifying properties prone to earthquake risk and likely to need strengthening.
QV had factored into revaluations the potential costs to strengthen some buildings and the fact they could be harder to tenant. She said overall property values in Nelson city had increased only marginally.
The capital value of properties have increased by 3.9 per cent overall while land value has increased 3 per cent, the provisional figures showed.
Nelson city's 1429 business properties (commercial and industrial) show a provisional decrease of 4.8 per cent in land value and 2.4 per cent capital value. The city's 18,725 residential properties show an overall 5 per cent increase in land and capital values, but the size of the increase will vary throughout the suburbs.
The new average value for residential properties in Nelson is now $397,000. December's rainstorm that led to slips around the region had not impacted on Nelson's Port Hills property values, Mr Kolff said.
"After the rain event the council passed to us a list of properties we know were affected and we reviewed valuations in light of the damage that occurred. We marked them so we could re-visit them.
"In terms of the Port Hills there's been no real effect on the market. It's still considered a blue chip location. It would appear that no stigma is driving down values in the area," he said.
In answer to a question from councillor Kate Fulton over whether the values were the same as the cost to build a new home, Ms Smits said cost had little bearing on the final outcome.
"The first thing valuation students are taught is that cost doesn't equal value," Ms Smits said. "We can really only value properties based on sales information."
However, the valuation process now incorporated more analysis such as the value of properties on the market, Ms Smits said. Computer modelling and "roadside inspections" were normally used to assess property values.
Property owners have until January 4 to object to revaluations which would be used for the rating year from July next year.
The Nelson Mail