Capital apartment value concern
Question from Julian updated on 22nd October 2013:
I'm looking at buying an apartment in Wellington and see that the asking price is lower than the rateable value. Why would this be? Is this something I should be concerned or wary about?
Our expert Ollie Mitch responded:
Hi Julian, the rateable value is not established by actual inspection of the property and therefore can’t be relied upon to provide an accurate indication of value. A quote from the QV website explains this further, "A Rating Value (RV) is an indicative market value at the date of valuation. It is undertaken on behalf of your council around every three years and is established using a mass appraisal process. It is mainly used to apportion rates within your area. Every property in New Zealand has an RV. This can be useful to know as it gives a guide to the price when buying and selling, but because it is only updated around every three years and the market may have moved, it might not give a true indication of the current market value of a property." I would be concerned with the valuation and make your own assessment of the property’s value and engage a valuer to do a full valuation of the property.
Ollie Mitch is head of sales at Iconicity, leading apartment investment specialists and the largest private buyer and seller of apartments in Auckland City. Phone 09 300 5073, email oliver@iconicity.co.nz or visit www.iconicity.co.nzSearch the Ask an Expert archive
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