Hamilton’s newly released council valuations could already be out of date, with one real estate boss warning it could be the first time in many years some houses sell below their RVs.
Homeowners in Hamilton received their new valuations last week. The city’s average RV jumped 57% to $922,800 since the last round of RVs were issued three years ago, with the average residential land value rising 63% to $568,700 over the same period.
Analysis by OneRoof’s data partner Valocity found that overall the biggest jumps were in suburbs that have a higher share of lower value properties.
Nawton’s average RV rose 69% to $733,348 while Queenwood’s was up 64% to $1.133 million and St Andrews’ was up 63% to $937,515.
Start your property search
“That’s what you expect when a lot of first home buyers and investors come into the market - they look at the lower end properties first,” Valocity senior research analyst Wayne Shum said.
Suburbs that saw the smallest changes in the average RV include Hamilton Lake, Western Heights and Hamilton Central, with Valocity explaining that property values in these neighbourhoods were already quite high.
Bader is Hamilton’s cheapest suburb with an average RV of $640,963 despite a 62% increase on its 2018 valuation of $397,981. Harrowfield is Hamilton’s most expensive suburb, with an average RV of $1.227m, up 51% from 2018.
Six properties, including two of Hamilton’s best-known homes, now have RVs over $5m. The Gallagher Chateau near Hamilton Lake has risen 10% and now boasts an RV of $10.8m, while the a Grand Designs-style house near Fairfield Bridge has an RV of $6.75m, up 50% on the previous valuation.
The Gallagher mansion boasts Hamilton highest RV. Photo / Christine Cornege
'Absolutely absurd'
The valuations for the new RVs were carried out in September last year, and time lag may leave some homeowners unsure as to what their properties are worth now.
So far Hamilton City Council has received 75 objections, with about a third of those arguing their new valuations are too low and two thirds arguing they are too high. Objections need to be submitted by June 8, 2022.
The most common reasons for objecting so far are building works or renovations that may not have been valued before, challenges around the land value increasing but value of improvements decreasing and a variance from another valuation, estimate or sale.
Red Bricks director and agent Rupert Bain said there appeared to be a large number of errors in the council’s latest property revaluations – with some far too high and others too low.
“We’ve had values coming in that are absolutely absurd,” he said.
This futuristic-looking house, made famous by the TVNZ show Art of Architecture, is one six Hamilton homes to have an RV of more than $5m. Photo / Fiona Goodall
One example was a three-bedroom, one-bathroom property in Chartwell on a 1000sqm section with a new RV of $2.1m. The current market estimate for this type of property, if sold to a developer, was about $1m, Bain said.
“We can’t figure how on earth they have come up with that calculation.”
In Dinsdale, the land value of a property had gone up, but the improvement value had dropped to $40,000. Bain said it was “ridiculously low” for a 260sq m home and he was still trying to get his head around how some of the values had been reached.
“Their [the council’s] sums are well off. With the shortage of builders and cost of materials and all those things, I’ve heard of homes that are a couple of hundred square metres and being valued between $40,000 and $100,000.” He said this made no sense when a 70sqm two-bedroom home cost between $280,000 and $300,000 to build.
Snapshot in time
Bain said house prices had dropped significantly since the revaluations were carried out in September 2021 and for the first time in many years there was likely to be a trend of properties selling below RV.
He blamed the drop in house prices on the new lending rules which had prevented a lot of people from getting finance.
While the valuations were carried out for rating purposes, Bain said they still had an impact on sale prices.
However, Phil Caldwell, managing director of Waikato-based mortgage advisory firm Lime Group, disagreed.
“[RVs] are pretty much obsolete. Banks don’t use them at all.”
Hamilton City Council financial support services manager Matthew Bell said RVs were a “snapshot in time” and may not reflect a property’s market value if it sold today.
WHERE YOUR NEW RV SITS
