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Real Estate Investar Blog

Rateable values climb steeply in the Timaru District

House and residential land values have climbed steeply in the Timaru District since 2014, spelling good news for the region's economy, the mayor and chamber of commerce say.

According to QV's three-yearly rateable value report, the capital value of the average house in the district has been put at $360,000, an increase of 21 per cent.

Residential land values also rose across the district, with an increase of 34.5 per cent on average and up to 50 per cent in some parts of Timaru.

South Canterbury Chamber of Commerce chief executive Wendy Smith said the increase in value was positive for Timaru and reflected an increase in population, and in supply and demand.

Overall, across business, farming, lifestyle, residential and "utility" properties, the capital value change of properties around the district was put at 13.4 per cent, while the land value change was 17.6 per cent.

However Smith cautioned the council against raising rates too high in accordance with rising land values, saying business and land owners would find compliance costs "creeping away on them".

However mayor Damon Odey said land value was only one factor to consider when it came to setting rates, and people did not need to be concerned just because their land value had risen.

"Services don't cost anymore just because your values have gone up.

"A lot of in-depth analysis is done," he said.

The QV report reinforced his idea the Timaru District was a great place to live, Odey said.

Smith said it was important Timaru's property market retained its affordability, which was a "key advantage" when it came to attracting families to the district.

Real Estate Institute of New Zealand Timaru ambassador Julian Blanchard said QV capital values would have "little impact" when it came to what buyers were prepared to pay.

However he agreed the fact they had risen at all showed Timaru's economy was doing well.

"We have good quality, well-priced houses in Timaru. If they were overpriced, people wouldn't buy them."

Gail Smits, of QV, presented a report on rateable values to the Timaru District Council on Tuesday.

Smits said on December 6, property owners in the district would receive their own individual rating valuations.

Dwelling values in Geraldine saw the least amount of change, at only 11.5 per cent.

The average house in Geraldine was worth $357,000, according to QV, and houses in West Timaru were worth $433,000.

Houses in Pleasant Point and Temuka were worth $337,000 and $324,000 respectively, while houses in north Timaru were valued at $383,000 on average.

Aoraki Development chief executive Nigel Davenport said the report was "evidence of a local economy in very good shape".

"A continual low interest rate environment of course provides confidence to purchasers, but we believe the key is that there is rising demand due to more and more people realising what a great place this is to live and do business."

Industrial land values increased by 30 per cent on average, and rural land values also rose. Dairy land increased by 7.6 per cent, forestry by 11.3 per cent, and horticulture by 9.9 per cent.

The report said lifestyle blocks were also currently in high demand, "partly due to limited supply and the lack of good residential sites".

"Pages and Gleniti Rd lifestyle [sections] are being converted to new residential sites, with significant development and value increases in this area."

When it came to the business sector, the capital value of commercial properties rose by 13.8 per cent, industrial ones rose by 13.1 per cent, and commercial accommodation rose by 12.9 per cent.

Land values for commercial properties rose by 22.4 per cent, while industrial land values rose by 30.9 per cent, and commercial accommodation land value rose by 37 per cent.

The Mackenzie District Council received its three-yearly report in September, but it was not public yet.

However council chief executive Suzanne van Aswegen said both capital and land values had risen "quite drastically".

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