The average house value in the capital has plummeted nearly 25 percent over the past three years. Photo: 123RF
Wellington homeowners are being warned the value of their properties might have fallen even further than what QV tells them.
The average house value in the capital has plummeted nearly 25 percent over the past three years, according to the latest official valuations, down to just below $1.1 million. The average land land value decreased 36.7 percent to $621,000.
"It sounds like big numbers, doesn't it, over a three-year period?" QV chief operating officer David Nagle told Morning Report on Wednesday.
"Most of the reduction occurred at the front end of that period - 2022 was particularly harsh on the Wellington property market, and nationally as well. So Wellington is following the trend of the rest of New Zealand, but probably hit just a little bit harder with the public sector tightening of the belt, and that's impacted on job security that's flowed through to the property market."
In 2021/22 he said there was a lot of 'FOMO' - fear of missing out.
"People that purchased a property three years ago would say, 'I probably paid too much,' and those that didn't would be probably thinking, 'I made a good decision and I'm in a better position now to buy.'"
Letters with the new values will arrive in mailboxes next week, and homeowners will have until the end of March to lodge an objection if they disagree with the outcome.
But with the economy struggling and homes still arguably unaffordable for many, Nagel said the values QV reports might already be out of date - and too high.
"This is a valuation assessed in September last year, so we're already five months past that date and we're probably seeing the market come back slightly further in that five-month period.
"A lot of commentators, and personally I'd agree with their predictions, [say] that we're probably at or very near the trough of the cycle, and there's still a few headwinds out there though. There's still pretty tight credit conditions out there, interest rates are coming back, but probably not quick enough for most homeowners' liking.
"And of course, there's still a lot of international uncertainty too with trade wars and conflicts that could have an impact on at least the rate of recovery."
Nor should homeowners expect a rate deduction, unless their home's value has fallen more than the average.
"Just because your value comes down, that doesn't necessarily mean that equates to a rates reduction," Nagel said.
"The rate increase for each property will depend on the council's overall budget that they calculate every year with their annual plan and the capital value change for each individual property, as opposed to the average change.
"So if your property has gone up or down, has come back by more than the average or less than the average, then that would flow through to your… rating liability."
QV data showed Crofton Down, Ngaio, Miramar, Strathmore Park, Kelburn Central and Northland experienced the biggest value drops.
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