The next release of rateable values (RV) in the Queenstown Lakes District is happening in October 2017. With the release only occurring every three years, it’s likely your property’s RV will have changed significantly in this time.
The region’s property market has also experienced dramatic changes in the same period. Values have risen sharply and buyer demand has sky-rocketed as we’ve reached the peak of the cycle — so the market value of your property may also have changed.
However, it’s a common misconception that your property’s rateable value is equivalent to its market value.
The two figures can, in fact, be very different and you may over- or (more likely) underestimate your asset’s value if you think your RV is your sale value. RVs don’t take into account vital influencing factors on value such as local property supply, buyer demand and property presentation — all of which can influence the price you would achieve.
So, as we prepare for RVs to be released, we’re encouraging home owners to find out their market value at the same time. With the knowledge of both, you can make informed decisions and gain a better understanding of the value of your assets, the sale price you’d achieve for your home and the effect any improvements or renovations might have.
Keep reading to find out more about rateable and market values.
What is a rateable value?
Your rateable value is the value assigned to your property by the council to determine your payable rates.
How is my rateable value determined?
Your RV is determined by Quotable Value Ltd NZ, which runs a computer analysis based on information supplied by the council. The analysis takes into account three main components to assign a value to your property:
- Capital value (CV) — the predicted value of the property based on recent comparable sales in the area.
- Land value (LV) — the predicted value of the land based on recent sales of vacant sections in the area.
- Value of improvements — CV minus LV.
Is the rateable value the price I would achieve if I sold my home?
Sometimes the RV can be a good rough-guide of the market value while other times it’s completely irrelevant. RVs don’t usually take into account things that make your property better or worse than others in the area, such as the condition of the house and land, chattels included, improvements and so on — so if you try and sell based on the RV, you could severely under-price your property. You would also be inadvertently ignoring important market information like buyer demand, supply and the optimum sale method.
What’s the difference between a rateable value, registered value and market value?
- Rateable value: an indication of the home’s value set purely to determine rates.
- Registered value: a value determined by a registered valuer is what the home itself is objectively deemed to be worth — this is the value you should achieve.
- Market value: the amount you end up selling the property for. It takes into account every detail of the house, the RV, the registered value and the state of the property market.
How can I find out what value I’d achieve if I put my home up for sale?
There’s only one way — to gain a market appraisal from a real estate consultant. While they may reference the RV, they’ll also consider other vital influencers in the market and their own local experience. They’ll give a value they expect you’re likely to achieve then, when you list, they do everything they can to achieve an even higher price.
Book a free market appraisal
By finding out your market value around the time the new RVS are released, you can gain a more complete understanding of your property and the value of your assets.
Book your free Harcourts market appraisal today and receive the following:
- A 30-minute home visit so our consultant can take every detail into account, arranged to suit you (even at the weekend).
- Information and statistics of comparable and recent sales in the area.
- Insight into the state of the market and what we think the future holds for local property values.
- Advice as to which sale method would achieve the best result for your property.
…all completely free of charge with zero obligation to list or sell your property.
Click here to fill out an easy online sign-up and we’ll quickly be in touch. Alternatively pop into our office, drop us an email or pick up the phone — our contact details for all branches in Otago can be found here.