Rants, Raves, Reviews

The Quotable Value Contradiction

By Gary R, in , posted: 11-Dec-2007 09:30

On Stuff this morning from the Dom Post:

'QV Wellington spokesman Max Myers said vendors undoubtedly relied on their rateable values to gauge the value of their property and that was a mistake.'

Now this from the FAQ on the QV website:

Is the RV lower than the market value?

While RVs are based on market sales, they are a snapshot of the property market at a single point in time. As real estate generally has tended to fluctuate over time, an RV cannot be expected to represent the true value for long.

Sale price usually includes chattels, while RVs do not include chattels. Chattels can often be quite considerable and include carpets, curtains, light fittings or other items sold with the property such as furniture, pool tables etc.

I'm trying to sell my house and the RV is too low because we've recently renovated.

This is now affecting my ability to sell. What can I do? Where renovation work has been completed that has not required Council consent, it is likely that QV will be unaware so have not included the value of this work in your Rating Value. QV can provide an updated Rating Value to include the renovation work, however this valuation will still be assessed using the market conditions prevailing at the time of the last general revaluation.

This is wrong on so many levels:

1. It is common industry practice to quote the RV when selling a house
2. All buyers, vendors and real estate agents gauge a property base line value on RV
3. Typically property in the area I live has sold for 10 to 20% above RV again because RV is the base line

QV contradict themselves by saying that relying on RV to gauge property value is a mistake but their FAQ's state that RV does not include chattels which can be considerable. Also they advise that if you have recently renovated (i.e. work that did not require a council consent) and you try to sell your house but the RV is too low you should ask QV to revalue the RV.

So what is the relevance of RV? The only relevance is that councils can use it to set your rates. As I have blogged before the Wellington City Council sends out a new RV notice once a year. You receive it in October but it does not impact on the rates until the following July. Again I think councils need to reassess how they decide rates, basing it on some esoteric figure pulled out of QV's number crunching, sausage machine seems no longer relevant or appropriate.

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Gary R
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