Is the RV all that important?

A year ago there was a difference of almost $100,000 between the average Christchurch City Council RV of $260,000 (set by council valuer Good Earth Matters in August 2004), and the average home price of $354,000 (April to June average for the council's area as calculated by state-owned valuer Quotable Value).

Now, the average RV for the council's area, according to the latest round of three-yearly valuations released in November, is $377,434. This compares with an average dwelling price in the three months to May 31 of $362,981 after a year of little or no price growth in most areas.

So most prices are close to, but not quite meeting, the current valuation.

The change from last year to now shows up the shortcomings of using the blunt instrument of the RV - a local authority taxation tool - in the finely tuned and fast- changing property market.

Christchurch valuer Mark Shalders, of DTZ, warns against putting too much store by the RV.

"We don't think rating values offer a particularly valuable guide to prices,"Shalders says. "There's better ways of valuing a property."

Shalders says one of the shortcomings of relying on RVs is that they are set on a certain date, and do not reflect market changes until they are done again three years later. Read more...