Right around now many home owners are receiving their updated ratings valuation from the local council and often feel quite delighted because their home is ‘officially’ worth more!
But how accurate are these valuations?
The first thing to be aware of is that a rating valuation is a mass appraisal of properties used to work out property rates. Banks will generally accept a ratings valuation when looking at your borrowing ability – the realty is though that your property could well be worth a lot more than the stated value on the ratings valuation.
Auckland Council have a disclaimer that states “the aim of the general revaluation is not to provide values for property owners to use for marketing, sales or any other purposes.”
Generally speaking, a lower ratings valuation is good as it means rate increases are moderated.
It’s no coincidence that the local authority usually makes a big deal out of making sure their rating base is told that there won’t be any rate increases in the year the updated valuations are released. That’s because there’s a natural flow on effect as a result of higher values that ensures an increase in ratings revenue collected in that year!
In any event, if you really want to understand market values of property, you need to invest a lot of time in the market. There’s loads of websites now that attempt to provide market values such as www.homes.co.nz but these rely on recent sales information, which can be out of date very quickly.
Our myproperties members are out on RoadTrips and working with agents every day – that means we’re updating our custom software with real time sales information that gets shared between our members. This kind of collaboration unlocks the real value of membership in our community.