Homeowners in Queenstown-Lakes could see a jump in their rateable values (RV) when they are released early next year if average property value increases over the last three years is anything to go by.
Unlike Wellington, where average values fell 20% between revaluations, average values in Queenstown-Lakes have jumped 27%, according to Valocity, OneRoof’s data partner.
The tourist town’s housing market performance has remained among the strongest in the country following the slump suffered by most areas after the Covid peaks with all Queenstown’s suburbs increasing in average value.
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The snapshot of values used for the three-yearly rateable values was taken in September this year, with homeowners due to find out their new RVs in March.
OneRoof’s analysis of property values in the district’s suburbs between the two valuation dates found sharp spikes in all but a handful of suburbs.
The biggest percentage increases were in John Creek (up 60% to $1.92m) and Glendhu Bay (up 52% to $9.9m), although both suburbs have seen few sales in the last 12 months. The biggest dollar increases were in Glendhu Bay (+$3.38m) and Speargrass Flat (+$1.79m to $5.88m).
The smallest rise was in Sunshine Bay – up just 11% in the three-year period, from $1m to $1.12m.
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The spikes come amid a flurry of big sales in the wealthy enclave in the last 12 months. A luxury home on Arrowtown-Lake Hayes Road fetched $9.5m in May this year, while the lakeside Wanaka estate where sports stars Richie and Gemma McCaw tied the knot sold last month for what is expected to be a record amount.
Wayne Shum, senior research analyst for OneRoof’s data partner, Valocity, said properties in Queenstown were selling for well over their 2021 RVs, but said RVs should not be used to price properties as they were simply a way for councils to divvy up the rates.
Some agents in Queenstown report there is not much buzz about RVs, but say that could change next year if there is a rates hike along with increased RVs.
Deni Bevin, from One Agency, said there could be challenges to higher RVs, especially by homeowners at the lower end of the property market who were hurting financially because any decrease in rates would be helpful for them.
“First home ownership in Queenstown doesn’t really exist. Affordable housing – I don’t think those two words go together, so there are some people who are doing it tough down here.
“I have to feel for those younger crew who are servicing a pretty high debt. I would say that every dollar counts in that regard.”
But Bevin pointed out even if RVs were challenged as being too high, lowering them might not affect the rates bill by much.
“It’s going to maybe go down a couple of 100 bucks, you know. Like, if you wanted to get your rates adjusted by $100,000 or along those lines, then you have to go through and pay for a registered market valuation and kind of prove it.”
A luxury property on Arrowtown-Lake Hayes Road, in Dalefield/Wakatipu Basin, sold for $9.5m in May this year. Photo / Supplied
David Gubb, managing director for Bayleys Queenstown, said the market had remained stable and that the lower South Island had held up better than other parts of the country.
While he, too, said the cost of living was high in Queenstown he was yet to hear much talk about RVs, which he said people should not use as the sole tool to assess the market value of their property.
“If you are buying or selling your property it’s a gauge, you don’t totally rely on that when assessing value.”
Fred Bramwell, director/sales consultant for Colliers, said he assumed RVs would go up a lot but also said RVs had no real relevance other than to the council.
“We don’t really put a whole lot of weight at all on the rateable values, that’s never made any sense.”
In the $1.5m-plus range, properties were selling for hundreds of thousands of dollars more than the RV – and Bramwell said he had never seen a sale in Queenstown for less than the RV.
Valocity senior analyst Wayne Shum says homeowners should avoid using RVs to price properties. Photo / Fiona Goodall
“I’m sure on the odd occasion it does happen but I don’t take too much notice of the rateable values at the moment. I haven’t really done that for years.”
A lot of buyers did follow RVs so agents had to be aware of them, but Colliers did not base appraisals on them, he said.
In “bread and butter” areas, like Shotover country, a lot of sales had taken place so there was more data to base RVs off but high-end Queenstown property was diverse and properties could sell for vastly different amounts compared to their RVs.
The RV affected what people paid in rates: “I guess if you’re a seller you’d like it up and if you’re a holder you’d probably like it down, wouldn’t you?”
Bramwell said while Queenstown’s market had performed well there had been a drop off in buyers from Auckland over the last 12 months, probably because some of those buyers have had trouble selling their homes in Auckland’s stalled market.
“They’re losing equity and not getting what they want out of any sales that they need, or if they are leveraging off an Auckland property they haven’t got much leverage.
“I’m assuming that those buyers will sort of be drifting back into the market when things change a bit.”
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