Te wāriu rawa

2020 property revaluations

The 2020 district-wide revaluation is completed and the new values apply for rating purposes from 1 July 2021.

The valuation process

We provided Lewis Wright detailed records of each property. Those records are kept up-to-date by property inspections for building consents, subdivisions and sales analysis.

Lewis Wright made a detailed review of all relevant sales to ensure that the new value fairly represents the market as it was on 1 September 2020. Notices of the 2020 rating revaluation were sent out in December 2020.

If you're selling or purchasing a property you should consider a market valuation from an independent valuer. Rating valuations are not prepared on the same basis as a private registered valuer's report.

Objections to rating valuations

Rating valuation objections closed with Council on 29 January 2021.

Rating process for financial year - 1 July 2021

Any objections to the 2020 District Rating Revaluation would be settled prior to 1 July 2021. This may take longer for late objections or if the objection goes to the Land Valuation Tribunal for settlement.

The rates for the 2021/2022 rating year are set at 1 July 2021 and are based on Council's budget for the 2021/22 year, rating valuation values as at 1 September 2020, our revenue and finance policy in the 2021-2031 Long Term Plan and our rate remission policy also in the LTP.

The legislation for carrying out rating valuations has not changed. Updated guidance as agreed between valuers and the Valuer-General has been used as above.

The way in which Council sets its rates has not changed. The revenue and finance policy and Council's rate remission policies were reviewed as part of the 2021-2031 Long Term Plan.

How does it affect my rates?

If your valuation increases by 50% it does not mean rates increase by 50%.

An increase in values does not increase the overall rates collected by Council.

Rateable values are only one component of calculating rates and are used to provide the basis for allocating some of the rates required across all properties in the district. The property valuations underpin how a property is rated.

The budget total Council needs each year is set in the Annual Plan process. This total is then divided across all ratepayers using a combination of factors including the rating value of your property. Other income sources for Council are also considered before setting the annual rates requirement

Information regarding licenced kiwifruit orchards

There's a view that the rating valuation methodology for licenced kiwifruit properties may not have been meeting the requirements because the licence to grow certain licenced kiwifruit variety (such as Gold3 and Zespri Red) wasn’t being assessed as part of the definition of the value of improvements.

The Valuer-General has regulatory oversight of the rating valuations system under the Rating Valuations Act 1998 (RVA). This includes promoting national consistency around the interpretation and application of the value definitions for capital value, value of improvements and land value within the Act.

There was a view that the rating valuation methodology for licenced kiwifruit properties may not have been meeting the requirements because the licence to grow certain licenced kiwifruit variety (such as Gold3 and Zespri Red)  wasn’t being assessed as part of the definition of the Value of Improvements.

The Valuer-General accepted that certain licenced kiwifruit varieties be included, based on the RVA definition of Value of Improvements which requires the assessment of the value of all work done on or for the benefit of the land.

For rating valuation purposes, the added value of the overall canopy is determined from recent sales evidence, in line with the capital value and value of improvement definition under the Rating Valuations Act 1998. Together the licence, structures, infrastructure, and the planted vines generate added value, which is recognised in market transactions and therefore market value.

The Gisborne District rating valuations are set at 1 September 2020, based on the market valuation of kiwifruit orchards at that date. The rating valuations must align with how a kiwifruit orchard would transact in the marketplace. Transactions occur on an overall canopy value per hectare: The land value includes the land and water consent. The value of improvement includes the kiwifruit licence, vines and infrastructure such as trellising, overhead canopy and irrigation.

Read the Valuer-General's statement - Gold kiwifruit property valuation change(external link)

Information about trends and values

Across the district values for residential / lifestyle properties have risen on average 64%, and 50% for all sectors since 2017. The land value alone for residential / lifestyle properties has climbed 90 - 100% due to the shortage of available residential land to build on. This has impacted and driven the average house price to almost $500,000 at revaluation date of 1 September 2020.

Gisborne has experienced an enormous demand in housing, with house prices still lower than in other regions, but steadily climbing. The market shows strong competition between first home buyers, investors, existing locals and new residents to Gisborne. This is impacted by lower interest rates and increasing equity.

While lower value properties have moved strongly above the average, rural properties moved on average 48% in the East Coast, Waikohu, Tolaga Bay and Poverty Bay Flats areas.

Market valuations change depending on the state of the market.

Rating valuations are set on the date of the general revaluation, this was 1 September 2020. They will not change (except for subdivision and building consents) until the next revaluation in 2023.

The rating valuations are prepared using rating methodology and are for rating purposes. Household chattels are not included in the rating valuation, so any expected sale price will include an additional amount to cover chattels.

Several factors are taken into account, including what other properties in the neighbourhood are selling for, the type of property and changes that have been made since the last valuation in 2017.
Rating valuations are independently audited by the Office of the Valuer General and need to meet rigorous quality standards before the new rating valuations are certified.

If you’re selling or purchasing a property, you might consider obtaining a market valuation from an independent valuer as rating valuations are not prepared on the same basis as a private registered valuers report.

Address

Average Capital Value

Average Value Change

Average Land Value

Average Value Change

City

$494,000

Up 64%

$238,000

Up 93%

Elgin

$372,000

Up 89%

$184,000

Up 131%

Inner Kaiti

$539,000

Up 64%

$275,000

Up 100%

Mangapapa

$474,000

Up 76%

$230,000

Up 109%

Okitu/Wainui

$1,010,000

Up 49%

$582,000

Up 54%

Outer Kaiti

$349,000

Up 78%

$163,000

Up 121%

Lytton West

$649,000

Up 58%

$270,000

Up 95%

Te Hapara

$461,000

Up 74%

$222,000

Up 111%

Whataupoko

$640,000

Up 61%

$297,000

Up 87%

Rural Residential

$465,000

Up 48%

$108,000

Up 66%

Average movement by sector

Sector

Average Capital Value

Average Value Change

Average Land Value

Average Value Change

Residential

$459,000

Up 65%

$226,000

Up 90%

Lifestyle

$530,000

Up 48%

$287,000

Up 63%

Horticulture

$2,260,000

Up 79%

$1,382,000

Up 56%

Arable/Cropping

$1,377,000

Up 41%

$1,274,000

Up 43%

Pastoral

$1,941,000

Up 34%

$1,686,000

Up 36%

Forestry

$784,000

Up 23%

$728,000

Up 24%

Commercial

$1,123,000

Up 33%

$391,000

Up 47%

Industrial

$1,390,000

Up 73%

$851,000

Up 103%

The rating valuation will factor any impact Covid-19 may have had on rural, commercial and residential properties in the Gisborne district as at 1 September 2020.

Since 2017, on average commercial properties moved 33% with a parallel 47% in land value, Industrial properties increased 73% with a land value surge of 103%.

There's limited demand for older and earthquake buildings that require strengthening. The shortage of well-located industrial land has driven the significant land value spike.

Since 2017, on average horticulture properties moved 79% with corresponding 56% in land value, driven by local and Bay of Plenty investors developing large scale gold kiwifruit orchards.

This strong performing sector is expected to grow even more over the coming years as new apples and kiwifruit plantings come into full production.

Current development cost including land purchase of around $800,000 per canopy hectare is spent for gold kiwifruit orchards with capital values of around $1 million per canopy hectare on mature orchards. This means a value movement of 200 - 300% for developing and establishing orchards. Water availability is the most significant restriction for future development.

For the first time gold kiwifruit licences have been valued as part of the improvement value. While the licence to grow G3 vines is already assessed together with the planted vines which generate added value and is recognised in market transactions, the same principle applies now to gold kiwifruit growers. Valuers and councils national wide will follow the same consistent approach, regulated under the Rating Valuation Act 1998 and audited by the Valuer-General. In short term, improvement values require the assessment of the value of work done, on or for the benefit of the land.

Since 2017, on average pastoral properties moved 34% and land value 36%.

The increase is driven by low interest rates and existing farmers and adjoining owners expanding.

A median sale price reached for 2020 is close to $10,000 per effective hectare and $1,100 per stock unit.

At present there's a tight supply and limited sales volume, returning stable values. Suitable greenfield-land to plant for carbon and harvest is underpinning the overall pastoral values.

Since 2017,  on average forestry properties moved 23% with respective 24% in land value.

Carbon units and timber components are not valued.

This sector shows a strong demand from overseas investors particularly due to the rising carbon price and attractive government policy

How properties are valued

A rating value is assigned to every property in New Zealand as required by law. A mass-appraisal approach is used to calculate rating values. All relevant property sales that occurred in an area around the date of the last revaluation are considered.

By using a local valuation service provider this ensures a more robust review of values and trends.

Non-market sales are identified and rejected. Then, a market trend is established and applied to similar properties in the area.

Supplement information of individual properties is also used, including issued building consents and subdivisions etc.

Other aspects are also considered to value your property, but are not limited to:

  • Location
  • Size
  • Condition
  • Character
  • Quality of the construction
  • Views / outlook
  • Access (drive on)
  • Garaging / off street parking
  • Other buildings or notable features
  • Sun (aspect)
  • Modernisation (kitchen and bathrooms)
  • Number of bedrooms / bathrooms
  • Privacy
  • Access to local transport and amenities
  • Street appeal
  • Noise

Maori freehold land value is discounted before it gets used for rating purposes. See more information about Maori freehold land

For more information, see the Q&A section