THE PRESS - Average Christchurch house rating valuations have risen 31% in just three years, but the bad news is the higher figures will be used to calculate new rating levels. The value of the average Christchurch home is now $377,434, up from $260,000 three years ago, according to
valuations released by the Christchurch City Council yesterday.

The figures, which include properties in Christchurch and Banks Peninsula, reveal house prices have risen the most in the Akaroa bays, Ferrymead, Linwood, Wainoni, Bexley, St Martins and Opawa. Properties in the Akaroa bays and Linwood have risen 52% over the past three years, compared to just a 27% rise in Cashmere. The total capital value of Christchurch and Banks Peninsula has risen 40% in three years.

The new valuations will be analysed by council staff and used to establish new rating levels from July. Personal valuations can be accessed on the council website at ww.ccc.govt.nz.
As a rule of thumb, the closer the house valuation rise to the 31% average the less likely rates will change, says council funds and financial policy manager Geoff Barnes. “If a property is valued more or less than the average, then there will be a rate impact. The council will consider this as part of its deliberations on the 2008 annual plan and the policy will be reviewed in 2009,” he said.

If the new valuations have a large rates impact on one group of people, then staff could recommend councillors approve changes to the ratings system. However, economists and property valuers have warned the higher valuations do not represent a windfall for homeowners. Tony Alexander, the chief economist at the Bank of New Zealand, says the only way the money can be realised is if you borrow against the higher valuation or sell the property and, begin renting. “If you have two people and three years ago one buys a property and the other does not, then the one who bought a house is undeniably better off now,” he said.

Mark McSkimming, a registered valuer for Simes, said the council valuations should be viewed carefully as they were based on economic models rather than actual property inspections. “We do not pay a lot of attention to the council valuation because it is a computer model rather than a proper valuation. The council valuations are sometimes very close, but there is sometimes about a 30% to 40% difference,” he said.

McSkimming said the growing attraction of sea views drove large percentage rises in the Akaroa bays, while buyers tying to get on the housing ladder in a rising market pushed prices higher in Linwood. “The rising market makes it harder for first-time home buyers so they have to buy where they can afford,” he said. The highest property valuations are still in the traditionally affluent suburbs of Fendalton, the Port Hills, Merivale and St Albans. The council valuation is based on analysis of house market sales during June and July this year. Homeowners can object to the council if they believe their rating valuation is incorrect. The deadline for objections is December 24.