Gerber v Chief Executive, Department of Natural Resources and Mines
[2001] QLC 72
•18 July 2001
LAND COURT BRISBANE 18 July 2001
[2001] QLC 72
Re:Appeal against Annual Valuation Valuation of Land Act 1944 Property ID No: 9091239 Local Government: BCC-Sherwood (AV00-90)
Helen M and Paul Gerber v.
Chief Executive, Department of Natural Resources and Mines
D E C I S I O N
Background:
This matter relates to land at 6 Devaney Lane, Corinda, and described as Lot 1 on RP 44174, Parish of Oxley. The subject land has an area of 4,661 m² and is accessed by a registered easement at its north-western corner over adjoining Lot 5 on RP 70706. The subject land is designated as “Low Density Residential” under the Brisbane City Council’s Town Plan current at the date of valuation of 1 October 1999. The land is used as a single dwelling site, and has been valued under section 17 of the Valuation of Land Act 1944 (“the Act”). The key issues are the nature of the land, impact of views, relativity and comparison of sales.
Access to the subject land is restricted to the registered access easement along a ridge from Devaney Lane to the current building site towards the south-eastern corner of the subject land. All normal utility services are available, and the land is seen as well located to facilities such as local shops, 1.2 kilometres to the north and east at Sherwood and Corinda. Schools are in close proximity, and the Indooroopilly Shopping town is 4.5 kilometres to the north. Bus and rail service the local shopping centres. Devaney Lane is bitumen sealed with concrete kerbing and channelling to the end of the access easement. The remainder of Devaney Lane to the north-west corner of the subject land is unformed, as are also Augustus and Francis Streets to the east and south of, and adjoining, the subject land. The only physical access to the subject land is via the access easement.
On 27 March 2000 the Chief Executive issued a valuation of the subject land at $320,000. Following an objection the Chief Executive confirmed that figure on 1
July 2000. The appellants have appealed that figure claiming the unimproved value should more properly be $305,000.
A Court supervised preliminary conference was held on 2 April 2001, but that was unable to resolve the matter, which was then set down for hearing on 15 June 2001. At the hearing on 15 July 2001, leave for the respondent to lead to an unimproved value of $385,000 under s. 68 of the Act was approved by the Court, and that is the unimproved value now defended by the respondent. Dr Paul Gerber appeared and gave evidence for the appellants. Mrs R Trigge, Senior Legal Officer, appeared for the respondent, calling evidence from Daniel James O’Connor, the departmental registered valuer now accepting responsibility for the valuation. The previous registered valuer responsible for initially determining the valuation at
$320,000, Mr Jim Corder, retired from the Department in March 2000, and was unable to represent the Chief Executive. It was agreed that a viewing of the property was not necessary.
The History of the appeal -
At the opening of the hearing Dr Gerber advised that it had been his intention to seek to have both the current matter, and the subsequent appeal against the succeeding valuation at 1 October 2000, heard concurrently. However the valuation at 1 October 2000 has not yet been appealed by the appellants, and the Court was therefore unable to address the two matters together. That subsequent appeal will be a matter for another occasion.
In outlining the history of the unimproved values, Dr Gerber advises that the preceding unimproved values of the subject land had been $290,000 (1 October 1997) and $290,000 (1 October 1998). That figure had then been increased to $320,000 (1 October 1999), and Dr Gerber advises that the unimproved value at 1 October 2000 is now $425,000. Dr Gerber notes that effectively the unimproved value has increased by about 50 percent since 1 October 1998 to its level at $425,000, a rise he claims is not supported by the evidence.
Dr Gerber challenges the authority for Mr O’Connor to amend the unimproved value of the subject land subsequent to the notice of appeal against a figure of
$320,000. However Mr O’Connor argues that in his assessment of the matter for court proceedings, he has reassessed the value which he now claims should be
$385,000. Mr O’Connor argues that s. 68 provides the power for such change, which he argues was advised verbally to the appellants at the preliminary conference on 2 April 2001, although no formal written advice to that end was sent to the appellants.
Dr Gerber argues that Mr O’Connor should have not sought to amend the valuation until the appeal had been heard, although he accepts that current pressures of work have apparently led to Mr O’Connor having to represent the Chief Executive to defend this matter, instead of the initial valuer. On that basis Mr O’Connor argues that it is his estimate of the unimproved value to which he must apply himself, and Mr O’Connor assesses the current unimproved value at $385,000.
The nature of the land -
The subject land is a relatively large and fairly regular shaped lot with a mainly steep crossfall from south-east to north-west. The site is dominated by a ridge line extending from the current building towards the south-eastern corner, and extending to Devaney Lane at its north-western corner. The steep curved access track along the ridgeline within the access easement rises and curves to the building site which is at about the 20 metre contour level. From the existing house site there are expansive and panoramic river views along the river towards the south.
It is agreed that the current steeply sloping nature of the topography restricts any development virtually to the current building areas. The small area at the rear of the existing dwelling towards the eastern boundary fence with unformed Augustus Street is relatively level. The existing dwelling is an old colonial (circa 1913) which is currently designated as “character housing” under the Town Plan. The access to Devaney Lane was inundated by the 1974 floods.
Mr O’Connor concedes that the age and character of the existing building was likely to make its removal or demolition very difficult, but he argues similar old houses have been removed in the area. He notes that most of the Corinda, Sherwood and Graceville areas have “character housing” imposed upon them, yet there has been some relaxation of that restriction depending upon the circumstances of each parcel.
Mr O’Connor also argues that theoretically anyhow he must view the subject land under s. 3 of the Act as if it was vacant, and he differentiates “character housing” from heritage listed properties. The latter he agrees cannot be removed, and the heritage restriction must be considered to run with the land. However he argues that it is not so with “character housing”.
A major concern to Dr Gerber is the current level of timber and undergrowth such as lantana, surrounding the subject land on three sides, particularly in areas which retard views and breezes. Mr O’Connor concedes that the subject land is on the western slope of the ridge towards the river, but argues such lands continue to demand high prices in Corinda in spite of the lack of any prevailing breezes.
Both parties agree that the views from the building site on the subject land are very good, however Dr Gerber is concerned that future timber growth was likely to impede those views. Dr Gerber notes for example that when he moved to the site in 1963, the views from the access easement were good to the river. However regrowth of palms and other timber, both on the subject land and other lands to the west, now restrict any views until one reaches the dwelling site.
Dr Gerber also argues that a Chinese elm tree and mangroves along the riverbank on Council land to the south-west of the subject land are now growing in height, and starting to restrict the expansive views of the river upstream towards Fig Tree Pocket. Dr Gerber is aware that the Chinese elm is a noxious plant, and he has unsuccessfully sought the cooperation of the Brisbane City Council to have it removed.
However he notes that even if he achieved the removal of the Chinese elm, the resulting views would be very marginally improved. Dr Gerber notes that mangroves are a protected species and he would be unable to destroy any of the current mangroves extant on the riverbank. For that reason he argues that the view of the river would someday be lost to the current land, and that possibility should be allowed for in the unimproved value. He notes that was the advice given to him by a previous departmental valuer (Mr Brennan) some years ago.
Dr Gerber also notes that a stormwater drain passes through the subject land along its northern boundary adjoining lots fronting Hilda Street. That depression is also the location of a sewer line and manhole, passing to two holding tanks on adjoining Lot 3 on RP 707076 to the north of the subject land. That stormwater drain floods regularly with heavy rain, and the ground in that area is invariably waterlogged.
Dr Gerber also notes that the current easement access to the subject land becomes an annoyance to the adjoining neighbours on Lot 5 (4 Devaney Lane), because of the need for the appellants to leave their rubbish bins in front of the neighbours’ house. However that is really not a matter for consideration in the current matter. Dr Gerber also concedes that there is no vegetation preservation order protecting any of the timber on the subject land. However he notes that even if he was to seek to remove any last intruding trees on his lands, the resulting improvements in the views would be negligible.
Dr Gerber argues that the part of Augustus Street and Francis Street adjoining the subject land to the east and south have been officially closed as roads, although he
provides no evidence of that legal situation. However it is agreed by both parties that there is no formation of those roads adjoining the subject land, and there is no physical access possible from that direction, and Mr O’Connor confirms that he has assessed the land on that basis.
In respect of the control of the timber on the riverbank to the south-west of the subject land, Dr Gerber advises that, following a subdivisional approval of lands to the south of Francis Street, a nature reserve has been transferred to the Council along the river’s edge. That virtually places control of timber on that area in the hands of the Council. There is also a Council park (43 Francis Street) to the east of Augustus Street. Most of the trees along the nature reserve adjoining the river are palm trees with some Chinese elms.
Mr O’Connor agrees that the good river views are an important feature of the subject land, but argues other features such as its elevation, size, privacy, location and proximity to services are also important. Mr O’Connor also concedes that the subject land does not have direct access to the river.
Relativity -
A key part of Dr Gerber’s concern is the apparent lack of relativity with surrounding parcels. Dr Gerber notes the following unimproved values:
| Parcel | Area | Unimproved value |
| 2 Devaney Lane | 837 m2 | $134,000 |
| 4 Devaney Lane | 766 m2 | $133,000 |
| 114 Hilda Street | 797 m2 | $134,000 |
| 133 Hilda Street | 508 m2 | $185,000 |
| 137 Hilda Street | 1139 m2 | $295,000 |
| 118 Hilda Street | 809 m2 | $131,000 |
| 116 Hilda Street | 809 m2 | $139,000 |
| 98 Hilda Street | 405 m2 | $197,000 |
| 99 Hilda Street | 415 m2 | $182,000 |
| Subject land | 4,661 m2 | $320,000 |
Dr Gerber argues that some of those parcels have views of the river (2 and 4 Devaney Lane) and yet have an unimproved value of only one third the value of the subject land. Dr Gerber argues that the most relevant comparison for relativity purposes is with 137 Hilda Street, which has the advantage of direct access to the
river, good unobstructed river views, and also the potential for further subdivision, which subsequently has occurred. The subject land by comparison is land-locked with no potential for further subdivision due to its easement only access, and its steep topography. Dr Gerber argues that comparison severely disadvantages the subject land. Mr O’Connor had made no direct comparisons with 137 Hilda Street, focussing instead of sales of vacant land in the relevant period.
Mr O’Connor agrees that 98 and 99 Hilda Street represent increasing unimproved values for smaller parcels as they increase in elevation up Hilda Street, and where there are some possibilities of glimpses of river views. Dr Gerber argues that there are no river views from those properties, and suggests that the higher lots have benefit from increased breezes, which the subject land does not due to the heavy surrounding vegetation. Mr O’Connor concedes those parcels do not have river views, but argues elevation and outlook for those parcels are important features affecting their unimproved value in the marketplace. Mr O’Connor notes that the top of Hilda Street at Dewer Terrace is one of the highest spots in Corinda.
In respect of the presence of river views from 2 and 4 Devaney Lane, Mr O’Connor argues both of those parcels have filling to some extent, and both were badly impacted by the 1974 floods. Discussions with those owners also suggested that the existing river views across the intervening open space Council park lands was now being impacted by trees. Dr Gerber concedes that there is one mango tree in that park that would partly obstruct the view of the river. However Mr O’Connor sees those views as more restricted than the subject land, because of the lower elevation, and they are also much smaller parcels in size. He sees their unimproved values at
$133,000 and $134,000 as relative to the subject land at $385,000.
While the subject land has been valued as a single residential parcel under s. 17 of the Act, it is agreed by both parties that some premium is paid in the market place for larger areas in some lots, particularly where views of the river are involved. While Dr Gerber concedes that point, he argues that it is the quantum that is paid for that larger area which is at the heart of the matter. Mr O’Connor relies in that observation upon the evidence of general sales of river view lands, and his wide general experience as a valuer.
Mr O’Connor also agrees that there is a premium paid for lands with direct access to the river, compared to lands with river views. However he has no evidence to quantify that premium difference, but agrees that there is a difference in value for that purpose.
Comparison of sales -
Dr Gerber advises that the immediate locality near the subject land has been a very stable area where there had been no recorded sales of properties over the last 20 years. Because of that paucity of sales, Dr Gerber had relied mainly upon relativity as his primary method of comparison. However he also provides evidence of the following sales to support his estimate of the unimproved value:
· Sale 1 – (118 Hilda Street - Lot 3 on RP 70706). This was an improved property with a dwelling which is in very poor condition and is to be demolished. The sale was purchased with the intention of subdividing that parcel as evidenced by a proposed subdivisional plan (Exhibit 4). The sale is badly affected by flooding and stormwater, but has a river view extending from between 40 degrees and 60 degrees in arc. Dr Gerber concedes that view is slightly less than half the view from the subject land.
The sale sold for $212,000 in March 2001, and has been applied by the respondent at $131,000 at 1 October 1999.
· Sale 2 – (Cnr Augustus and Hilda Street – Lot 1 on RP 900269). This corner parcel is an improved parcel of area 405 m2 with a dwelling. The sale is approximately level from north to south, but falls about six metres from east to west. Dr Gerber argues that there are glimpses of the river from the sale, although he concedes the views are very obstructed.
The sale sold about May 2001 for $219,000, and has been applied by the respondent at about $130,000.
· Sale 3 – (137 Hilda Street - Lot 1 on SP138680). This was an improved sale with an old brick dwelling which has an area of 1,139 m2, and direct frontage access to the river. The property has extensive unobstructed views of the river, which Dr Gerber argues are wider but lower in elevation than the views from the subject land. The sale was subsequently subdivided into three
smaller lots.
The sale sold in February 2001 for $410,000, and was applied by the respondent at $295,000.
Dr Gerber argues that in respect of his Sale 1 (118 Hilda Street), the useable part of that property is about comparable to the useable part of the subject land. In respect of the river views from 137 Hilda Street, Dr Gerber advises that the purchaser of that parcel subsequently removed trees from that land, as well as a significant Chinese elm tree on the adjoining land owned by a boat club, thus enhancing the river views from 137 Hilda Street. Dr Gerber has been unable to achieve the removal of the Chinese elm tree on the Council land which impedes his own view of the river.
To support his valuation, Mr O’Connor supplies the following sales:
· Sale 1 – (16 Douglas Street, Sherwood - Lot 2 on RP 79400). This was a 1,624 m2 residential low density parcel with an old dwelling which has subsequently been demolished. The sale has direct river access and a westerly view to the river. The sale slopes from the road level to about reduced level 10 to 14 metres (Australian Height Datum) at the building site. Much of the
lower areas of the sale would have been impacted by the 1974 flood, although current flood mitigation arrangements in the Brisbane River catchment now indicate that the building site of the sale would be above flood level.
The sale is seen as overall slightly inferior to the subject land due to the sale’s lower elevation, smaller size, and inferior views of the river. The sale has a shared access easement with adjoining parcels, although the quality of homes near the sale are superior to homes near the subject land.
The sale sold in October 1998 for $470,000, was analysed at $467,000, and has been applied at a conservative figure $370,000.
· Sale 2 – (32A Douglas Street, Sherwood – Lot 6 on SP 118159). This is an 843 m2 residential low density vacant parcel with a shared concrete driveway easement access with three other parcels. The sale slopes westward towards the river, and had river views at the time of sale, but those views are now only glimpses between new buildings. The sale does not have direct access to the
river. There is an underground drainage easement to the river.
The sale is seen as overall inferior due to its smaller size, lower elevation, far inferior views of the river, and an inferior shared access. However the quality of homes near the sale are superior to the property surrounding the subject land.
The sale sold in August 1999 for $230,000, which was analysed at $226,000, and has been applied at $198,000.
Sales 1 and 2 are about 300 metres north of the subject land.
Dr Gerber concedes that river views from either of Mr O’Connor’s sales are inferior to those from the subject land. However he argues that the direct river access of Sale 1 (16 Douglas Street) is a distinct advantage not available to the subject land. Mr O’Connor notes that the westward sloping topography of the Douglas Street sales would also limit the availability of prevailing breezes similar to the subject land, although the latter is also shielded by trees.
In respect of his sales, Mr O’Connor agrees that Sale 1 has direct river access and was twice the price of Sale 2, but he argues Sale 1 had about double the area of Sale 2 as well.
Decision:
The Respondent’s unimproved value -
Before proceeding to examine the evidence, I turn to Dr Gerber’s concern that Mr O’Connor has exceeded his authority in seeking to amend the unimproved value he now contends for at the hearing. I note that Mr O’Connor seeks support for his actions in s. 68 of the Act which relevantly states:
“Alteration of valuation after notice of appeal and effect thereof -
68(2). Moreover the chief executive may after receiving notice of appeal reduce the valuation and may not less than 14 days before the commencement of the sittings of the Court at which the appeal is to be heard give notice of such reduction to the appellant who may not less than 7 days before the commencement of the sittings … give to the chief executive and to the court, as the case requires, notice that the appellant accepts the valuation as reduced and thereupon the appeal shall be determined.
(3) If the appellant does not give such notice the valuation as reduced shall be deemed to be the valuation appealed against.”
However s. 68 refers to either amendment by the chief executive (in accordance with the notice of appeal) (s. 68(1)); or to reduce the valuation (s. 68(2)). There is no specific mention in s. 68 to a move by the chief executive to increase the valuation, unless that had been the intention of the appellant in his notice of appeal. On that basis there is no specific support for an increase in the unimproved value.
However I accept that Mr O’Connor has to defend his valuation to the best of his professional ability, and it would be in accordance with his understanding of his evidence that he now seeks leave to amend the former valuation determined by the previous valuer. After all, valuation is not an exact science, and it depends entirely upon skills and judgment in assessing the market place. Because the original valuer is no longer available to defend the previous unimproved value, it is appropriate that the value submitted by Mr O’Connor reflects his considered opinion of the value.
However in respect of the amount considered by the respondent in this matter, I note that power for the Court to determine the final valuation of the subject land is found in section 66 which directs relevantly:
“66. Upon an appeal under section 55 the Land Court or, upon the rehearing of such appeal, the Land Appeal Court may
(a)affirm the valuation appealed against; or
(b)reduce or increase the amount of that valuation to the extent necessary in its opinion to determine the same correctly under, subject to, and in accordance with this Act.”
The Nature of the land -
There are four issues relating to the nature of the land including its restricted area for building purposes, the impact of trees and vegetation, the restricted easement access and the extent of river views from the site. It is also important to note that the subject land has no direct access to the river. It is agreed by both parties that the extent of timber does restrict the views, and the steepness of the land limits how far the appellants can extend their living areas, even on such a large parcel of area 4,661 m2.
However both the timber and the topography also ensure privacy from neighbours, an attribute likely to be seen as valuable in the market place. While I accept Dr Gerber’s advice that the useable area on 118 Hilda Street is about comparable to the useable area on the subject land, there is some difference between those parcels in respect of overall size and the distance from neighbours.
While the subject land has been valued as a parcel used exclusively for purposes of a single dwelling under s. 17, that does not mean that the area of the land provides no input into the assessment of its value. While residential sites are not valued on a pro rata per square metre basis, the various features of each parcel contribute to its overall value. That was noted by the Land Appeal Court in Hans and Else Grahn v. Valuer-General (1992-93) 14 QLCR 327 where it said at page 330:
“As the Land Appeal Court said in its decision on the appellants’ previous appeal (H and E Grahn v. The Valuer-General, AV89-246 and 247, 13 December 1990):
‘for the purpose of valuing residential sites, the preferable method of comparison is on a site to site basis and not on the basis of a unit area valued comparison. Site to site comparison should take into comparison such matters as the size of the lots, the situation of and access to the lots, the shape and topography of the lots etc. … and comparisons on a unit area basis do not necessarily reflect valuation considerations for the above features.’”
The key attributes of the subject land, other than some component for its much larger than normal size for a single dwelling parcel in that area, would appear to be its elevation above the river, and the expansive views of the river that it currently maintains.
There is some risk that current vegetation, including the protected mangroves, may gradually reduce the views from the subject land. However the photographic evidence confirms that the elevation and aspect of the river views would be attractive features in the market place. Should those views eventually disappear because of vegetation, about which there is no capacity to reduce its height or width, then that would be a matter for consideration at that time. But at the date of valuation of 1 October 1999 the views of the river are an attractive feature.
In respect of the easement only access strip I accept that was likely to be seen as a disability, but Mr O’Connor concedes that point, and he has sought comparisons only with sales of land with similar access problems.
Relativity –
A key part of Dr Gerber’s evidence really focuses upon whether relativities with surrounding parcels are appropriate. From the relativity schedule provided, it is clear that the lands generally in Hilda Street do not have similar views of the river as the subject land, and those parcels are also much smaller than the subject land. However it is noted that lands as small as 405 m2 with virtually no views of the river have been valued at $197,000. I believe the lesser unimproved values of 2 and 4
Devaney Lane, and 118 Hilda Street, reflect their disabilities of being low-lying and subject to flooding and filling.
I would agree however with Dr Gerber that the most important comparison lies with 137 Hilda Street at $295,000. While that parcel has an overall smaller area than the subject land, its direct river access was likely to have compensated for the smaller size.
In drawing comparisons with 137 Hilda Street, I note that the subject land has been valued under s. 17 as ignoring any “potential for subdivision” in determining its unimproved value. I presume that the unimproved value of 137 Hilda Street at
$295,000 was also made on a similar basis, as that parcel has subsequently been subdivided into three new lots. However I have no idea of the subsequent valuations of each of those smaller lots, and that is not for consideration in this matter.
The difference between 137 Hilda Street ($295,000) and the subject land ($320,000 or $385,000) rests really mainly upon the impact of the difference in size and elevation of those parcels, and the impact of the direct water access of 137 Hilda Street. In order to assess those differences I turn to the sales evidence.
Comparison of Sales -
In seeking the use of sales of vacant lands or lightly improved lands I note that has been the preferred method adopted by the Courts. Indeed in comparing the use of sales with comparisons of relativity, I note in WM and TJ Fischer v. The Valuer- General (1983) 9 QLCR 44, where the Land Appeal Court said at page 46:
“It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels. Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence.”
That was also followed in R and MM Barnwell v. The Valuer-General (1990-
91) 13 QLCR 13 at 16; and again in Hans and Else Grahn v. The Valuer-General
(supra) at 328.
I turn first then to Dr Gerber’s sales and note that those are all very late sales, well after the relevant date of valuation of 1 October 1999. Those sales would also be late sales in respect of the subsequent valuation at 1 October 2000, and provide little assistance in determining the state of the property market in 1999. Sale 1 is for a clearly inferior parcel in size, topography and extent of views of the river; while Sale 2 is for an improved property where the added value of the dwelling, if any, has not been determined. Those two Sales provide no assistance.
The use of Sale 3 is also very limited, but it does indicate what the market would pay in 2001 ($410,000), for a riverfront parcel with unobstructed views of the river. The history of the unimproved value of the subject land for 1 October 2000 at
$425,000 would suggest a rapidly rising market, and any reliance upon the sale of 137 Hilda Street would be most unreliable in the current matter.
I note that the use of comparable sales provides evidence in the movement of the market over a period of time, particularly where vacant land is becoming scarce and therefore the resulting prices are indicating substantial increases. This was found in Hurdis v. The Minister (1957) 2 LGRA 132, where Hardie J. found at 138:
“Another matter which would be important to a prospective purchaser was the marked upward trend in values of land in the area during the period preceding the relevant date. … That increase, particularly in the latter portion of the period, would be a significant matter for a prospective purchaser to bear in mind when considering what would be a reasonable price for him to pay for the subject land. It has another significance also, in that it demonstrates that a sale otherwise comparable and useful for the purpose of establishing values in the area at the relevant date, would lose much of its comparability and usefulness
if it took place at a point of time far or substantially removed from that date.”
In adopting comparable sales I note that minor differences between the sales and the subject land do not render the sales as non-comparable. It is the skill of an experienced valuer which draws an appropriate balance between the properties.
I turn then to the sales supplied by Mr O’Connor, and note that those represent two different types of property. Sale 1 reflects lands with direct access to the river, while Sale 2 reflects lands with only views of the river. While Sale 1 is twice the size of Sale 2, its sale price at $470,000 demonstrates an increase in price above Sale 2 ($226,000) well beyond that normally paid for lands which are similar in all respects except for size. The extra premium is clearly associated with the direct river access of Sale 1, which must therefore reflect something less than a premium of 100 percent for direct access to the river.
While any analysis of only two sales provides little real comparison between direct river access lands and those only with views of the river, it may be useful in considering the application of those sales to the subject land. Clearly the elevation and views of the river at the subject land are superior to Sales 1 and 2. Presumably a parcel with direct river access, but with the privacy and river views comparable to the subject land, would command a price greater than $470,000. The question is by how much greater would that hypothetical parcel exceed the sale price of Sale 1?
If I seek guidance in the late sale of 137 Hilda Street at $410,000, I note that in a rising market a smaller parcel without the elevation and privacy of the subject land, but with direct access to the river, was assessed in the market place at $410,000. The views from 137 Hilda Street and the subject land are approximately equal in respect of their expensiveness. By its very nature direct access to the river was likely to be more restricted than areas with river views, and accordingly, more prized in the market place.
While the above may be interesting to contemplate, I must rely upon the wide experience and considered opinions of Mr O’Connor as a valuer. He concedes that a premium is paid for direct river access, but offers no other advice on that premium. The matter for consideration therefore is what weight do I allow for direct river access, and what weight for superior river views, elevation and size.
If I then compare the original relativity applied by Mr Corder between the subject land ($320,000) and 137 Hilda Street ($295,000), I find that a smaller parcel with direct river access was seen as inferior to the larger subject land without direct
access to the river. If I then consider Mr O’Connor’s relativity between those two parcels, I find that Mr O’Connor has further increased the unimproved value of the subject land to $385,000, suggesting greater reliance upon the elevation and size of the subject land. But that, in my opinion, would tend to be in conflict with the premium attached to the scarcity factor for direct access river front lands. To the above conclusions I must then allow for the superior quality of development, and presumably superior location, of homes surrounding Mr O’Connor’s sales.
On balance I believe that the direct river access and superior locality of Sale 1 would suggest that Sale to be slightly superior to the subject land in the eyes of the market place. However if I then consider the application of that sale by Mr O’Connor at only $370,000 (79 percent), when the sale was an early sale (October 1998) in what proved to be a rising market, then I believe that is a very conservative application of that sale.
However in using his judgment of the application of his Sale 1, Mr O’Connor has no doubt considered the wider impacts of relativity and a wider range of sales in the market place to determine his opinion of an average market trend. On that basis I accept Mr O’Connor’s applied unimproved value of $370,000, and I feel the subject land would have an unimproved value of about $350,000 at the relevant date. However clearly the rising nature of the market would suggest that such a figure would be a conservative estimate of its value.
Conclusion:
Having considered the whole of the evidence I am persuaded that the appellants have partly proved their case. The appeal is upheld, the valuation determined by the Chief Executive is set aside, and the unimproved value of the subject land described as Lot 1 on RP 44174 is determined at $350,000.
MEMBER OF THE LAND COURT
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