No basis for ‘wildly wrong’ valuation claims – Council & QV

Auckland Council and Quotable Value say there is no justification to suggest that 30 per cent of Auckland properties recently revalued are ‘wildly wrong’.

Kevin Ramsay, Auckland Council’s Chief Finance Officer said the claim by a Hawke’s Bay based valuation company was itself ‘wildly wrong’, factually inaccurate and does not stand up to scrutiny.

He said the company’s claim that the valuations don’t accurately reflect sales in October is misleading. The council valuations are based on sales and data pre-July and the market may well have changed in the four months to the end of October.

Jan O’Donoghue, Operations Manager Northern, for Quotable Value said: “There is no justification to suggest that 30 per cent of all valuations are wrong.

“The sales statistics show that the Auckland market has continued to rise since the July 2014 valuations were published. In some parts of Auckland prices have increased 5 per cent in the past three months alone.”

She said the valuations set meet the requirements of acceptable accuracy with the majority of properties selling within 10 per cent of the assessed rating valuation.

Mr Ramsay said rating values are assessed on a number of assumptions set out on the Rating Valuations Act, one being that the property is freehold.

“To compare the sale of a leasehold property to a freehold CV is erroneous and misleading,” he said.

He said the council’s valuations meet the requirements of the Valuer-General and homeowners can have confidence that the valuations for rating purposes are accurate. The 2014 valuations have been approved by the Valuer-General and have been certified as meeting the required statistical standards set out in the Rating Valuations Rules.

“In any mass appraisal exercise of 525 000 properties there are bound to be some anomalies, but the revaluation process is a fair and equitable exercise and the objection process allows for any potential anomalies to be reviewed.”

Before any council can use Rating Valuations as a Rating base they must meet the statistical tests set out in the Rating Valuations Act 1998, Regulations and Rules.

The Valuer-General undertakes a high level review process including an on-site audit to check the overall accuracy of proposed values, the revaluation process and the supporting evidence before certifying that the values are fit to be used for Rating purposes.

As part of the certification process the Valuer-General runs statistical tests for mass appraisal valuations based on international best practice measures.

“It’s important for people to understand our valuations are not a guide to property values for real estate sales. Our valuations are an exercise to determine how total rates are allocated across all properties,” said Mr Ramsay.

“What a specific property sells for will be influenced by an individual’s emotional drivers - factors that a mass appraisal process cannot reflect.”

Mr Ramsay said that because the revaluation is a mass appraisal exercise council recommends property owners get independent professional advice, such as that provided by Valuers, when buying or selling properties.

He said if property owners think their valuation is incorrect compared to sales prior to July 2014 then they should exercise their objections rights.

ENDS

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