This year the QSVS re-valued all 58 rateable local governments in Queensland
(as at 1st October 2010), with over 1.6 million valuations
undertaken, scheduled to take effect from 30th June 2011 for local
government rating, state land tax and state land rental purposes.
The floods and extraordinary weather in December and January delayed the
valuation results until late month, giving time for the weather impact to be
taken into account in each of the state's 41 disaster areas. Some 23,000
flood-affected properties were re-valued.
The valuation process also changed aligning us with the rest of Australia.
Site value is now used rather than unimproved value assessment for all non-rural
land. Site value is the amount which land could be expected to sell for,
without any structural improvements, such as houses, buildings or fences. A
site valuation includes site improvements to the land, such as clearing,
filling, revetments, levelling, drainage works and remediation - whereas
unimproved value assessments do not. Excavations associated with a building,
however, are not included; nor are intangible elements such as infrastructure
But since their release, complaints began to surface - mostly about the
degree to which values have risen and especially in those areas rated only a
year or so ago. The protests have been so widespread that we decided to take a
Site value changes, both up and down, can be attributed to a number of
factors including the introduction of the new methodology (as mentioned above);
market movements; the time between valuations and the effects of the recent
Now to cut a long story short, the change in valuation methodology, at least
at helicopter level, appears to have gone smoothly and the government did step
up and re-value those properties affected by the January floods. But as is
often the case, the devil is in the detail. And when you start breaking down
the actual site valuation results, some serious cracks appear.
When looking at site values for whole council areas,
surprising results emerge. Last year, for example, residential site values rose
nearly 7% in Bundaberg but only 0.1% in Hervey Bay, yet they both share similar
average residential site values of $129,000 and $135,000 respectively.
Likewise, Logan City's residential values rose twice as fast as those in Ipswich
last year. Why?
And how come Gladstone's residential values grew 5% last year and Mackay's
just 0.3%, whilst they actually fell in Rockhampton by 0.2%? They rose 5.6% in
Gympie and 10.3% in Toowoomba over the same time frame. None of this makes
sense at all.
What does make sense is that average land values in flood-affected suburbs
dropped whilst values of those unaffected suburbs didn't, but some of the
results on a suburb by suburb basis are also somewhat
Why, pray tell, did site values, on average, rise by 13.2% across Brisbane's
northern suburbs, but by only 1.2% on average across the city's southern
suburbs? Site values rose 11.4% across Brisbane's west but only 4.3% across its
eastern flank. What, I wonder, has happened north of the River to deliver such
a lopsided result? What has stuffed up across the south?
But there's more. Why have site values risen 9% across the Sandgate
foreshore but shown no growth in Manly - the new Redcliffe Bridge perhaps? But
then if new infrastructure influences results, why have site values dropped on
average by 3.5% across those suburbs within close proximity to the new Richlands
Why have Chermside's site values gone up by 19% but Carindale's by just 4%,
while Mount Gravatt's have shown no growth at all? Has the value of land in St.
Lucia really increased three times faster than the same dirt in neighbouring
Things get even stranger when looking at individual
streets. I picked three in Kenmore as a case study. No property in
these three streets flooded; they all are within a short walk of each other
(within a 500 metre radius) and are all accessed off the same minor collector
Site values in one street fell consistently for all 16 properties, by 20%.
The next, also 16 homes, saw an average fall of -11%, yet four properties saw
their site values rise. And the third street, with 35 homes, saw site values on
average rise 6%. In this longer street, some site values dropped 20%, whilst
others rose by 35%! Remember, not one of these houses was flooded, and in my
opinion, some that dropped in value are the best positioned in the street.
Also, why does someone with an 800 sq m allotment have a site valuation of
$320,000, whilst a 1,500 sq m allotment in the same street is valued at
$215,000? A similar thing can be found in townhouse developments. In the
projects we analysed across Brisbane's inner west, some townhouses have site
values 40% higher (on a per sq m basis) than other townhouses in the same
What is heck going on?
Look we applaud the change in methodology; the effort to re-value flooded
property and transparency (a rare thing in government these days) by allowing everyone
(free until 1st August 2011 at least) access to all site valuations
across the state. But we are scratching our heads as to the inconsistencies
uncovered and we are not alone. Along with many others, we feel that an
explanation is warranted.