Monday, March 17, 2014

Rates hike for Edge Hill?

I have sorted the latest Valuer-General land valuations for Cairns by suburb. The table below sorts these, top to bottom, by median value change and then by the newly updated median value. Edge Hill leads the way with a jump in median values of 21.1%.

The numbers here align with a previous report and my recent post on Median property price malarkey. The story here is pretty much as I suggested then. Recovery in the Cairns property has been patchy rather than broadly based where the response so far is less than any suggested boom.

Again, care must be taken with median values in suburbs like Edge Hill and Whitfield where the scale can vary from hillside elevated elites to something down in the ditch. The residential median value change for Cairns overall was 2.1% and less than that for multi-unit land.

The primary purpose of these valuations is for council rates and land tax. This is often misunderstood and cynically exploited by politicians claiming credit for rate increases below the increase in property valuations. Campbell Newman was particularly adept at this when property was booming in BNE!

What matters for your rates are you relative valuation compared to the rest of the council area. On these numbers, assuming no significant change in council policy, the median residents of Edge Hill could expect a rates hike of about 20% in the general rates component.

This is not unusual in a period when a market and valuations begin to move. Different suburbs move at different times but more often than not revert towards historical relative mean over time and cycles. Cairns is now rare in being a large council which does not average valuations over a 3 year period which would smooth this volatility in council rates.

There are a few interesting aspects in these numbers. Largest increases are mostly related to higher value suburbs. An anomaly here may be Freshwater / Stratford. My guess and feedback is that there has been minimal turnover in this tightly held suburb which could play catch-up although values remain comparable with Edge Hill.

There has also been a modest increases along the southern corridor suburbs. The big jump in Gordonvale is an anomaly here. However, previously Gordonvale has been heavily sold down with receiver land sales which had been noted in previous valuations, so should be seen as a recovery from that and land values remain modest. Council rates in Gordonvale will fall below the minimum rate valuation anyway.

Also, beware those percentage changes because of rounding in the values. This could make relativities appear more lumpy. Again, valuations are at October 1st 2013.


Suburb
No. of residential properties Current median value New median value Median value change
Edge Hill 1,203 $177,500 $215,000 21.1%
Gordonvale 1,724 $91,000 $105,000 15.4%
Whitfield 1,278 $200,000 $227,500 13.8%
Palm Cove 502 $205,000 $225,000 9.8%
Redlynch 2,362 $152,500 $167,500 9.8%
Smithfield 1,432 $147,000 $157,500 7.1%
Trinity Park 901 $147,000 $157,500 7.1%
Kewarra Beach 1,755 $155,000 $165,000 6.5%
Trinity Beach 1,248 $162,500 $172,500 6.2%
Kamerunga 191 $150,000 $157,500 5.0%
Clifton Beach 747 $210,000 $220,000 4.8%
White Rock 1,266 $110,000 $115,000 4.5%
Edmonton 3,027 $114,000 $119,000 4.4%
Bentley Park 2,513 $120,000 $125,000 4.2%
Mount Sheridan 2,996 $124,000 $129,000 4.0%
Freshwater 531 $210,000 $210,000 0.0%
Stratford 353 $190,000 $190,000 0.0%
Kanimbla 845 $167,500 $167,500 0.0%
Brinsmead 1,883 $162,500 $162,500 0.0%
Cairns North 336 $157,500 $157,500 0.0%
Bayview Heights 1,630 $152,500 $152,500 0.0%
Caravonica 603 $150,000 $150,000 0.0%
Parramatta Park 546 $147,000 $147,000 0.0%
Yorkeys Knob 524 $147,000 $147,000 0.0%
Earlville 1,081 $138,000 $138,000 0.0%
Holloways Beach 686 $137,000 $137,000 0.0%
Mooroobool 2,109 $135,000 $135,000 0.0%
Woree 905 $135,000 $135,000 0.0%
Machans Beach 394 $130,000 $130,000 0.0%
Manunda 930 $128,500 $128,500 0.0%
Westcourt 617 $128,000 $128,000 0.0%
Manoora 982 $120,000 $120,000 0.0%
Bungalow 475 $118,000 $118,000 0.0%
Babinda 437 $74,000 $74,000 0.0%

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