A drop in Central Otago property values in the past three years is unlikely to have a dramatic impact on rates bills.
The revaluation of the district has just been completed and the new rating valuations will be posted out to property owners on Monday. Throughout the district, there has been a 5.9% decrease overall in capital value and a 9.3% decrease in land value.
Central Otago District Council accountant Karen McCarthy said yesterday council staff were still working out what impact the new values would have on the rates but the biggest component of most rates bills was fixed charges. Those figures would remain the same.
The property's land value or capital value were also taken into account, depending on the type of rate it was, but a drop in values did not necessarily lead to a corresponding decrease in the rates bill, she said.
"We still need to collect the same amount from throughout the district in rates."
Although the new valuations are dated September 1, 2010, they will not be used for rating assessments until July 2011, Ms McCarthy said.
A break-down of the figures and their impact on rates across the district would be completed in time for the council's December 15 meeting.
Quotable Value southern operations manager Brendon Bodger said the district was worth $6.38 billion and the average house was valued at $297,000, down from $311,000 in 2007.
There was a lower demand for all property, represented by low sales volumes, which followed the nationwide trend, he said.
"As far as residential property is concerned, there's been a 5-10% correction in the values, which is nothing too dramatic."
He said the new valuations were "on the back of two significant increases in values at the past two revaluations".
There was a 24% rise in capital values and a 30% increase in land value in 2007.
The capital value of residential properties has dropped 10.2% this time, while the capital value of lifestyle properties has declined 8.4%. An abundance of lifestyle blocks was not helping that market, Mr Bodger said.
"Forty-six percent of all lifestyle properties are vacant."
However, the values of lifestyle blocks around the main towns of Alexandra and Cromwell had "held up better", he said.
Horticulture and vineyard land values had dropped 22% .
"That's mirrored what has happened in the rest of the country. There was a surge in those values in 2007 and 2008, and they were on the way up then but have dropped back now."
Central Otago rural values were more influenced by pastoral farming and there was less influence from the dairy sector than in some of the other South Island districts. The value of dairy land was up 22% in Central Otago but there were only 17 dairy properties in the district.
Pastoral fattening properties were at similar values to 2007, while pastoral grazing property values had dropped 10%.
Commercial and industrial land had decreased 2% in capital value and 11.8% in land value.
Investment rates of return were typically 0.5 to 1.0% above 2007 levels, he said. There was rental growth of 5% to 20%, compared with 2007.
Land-value levels for Alexandra business-zoned land were similar to the 2007 valuation, while industrial-land value in Cromwell had decreased 20% in the past three years.
There was a lot of vacant commercial land in that town for sale, Mr Bodger said.
"It reached pretty significant levels in demand, as an overflow from the Queenstown market last time [in 2007]."
