Giudes v Chief Executive, Department of Natural Resources
[1997] QLC 198
•12 December 1997
|
BRISBANE
12 December 1997
Re: Appeal against Annual Valuation -
Valuation of Land Act 1944 -
City of Townsville.
(AV96-516).
Michelle Giudes
v.
Chief Executive, Department of Natural Resources
(Hearing at Townsville)
D E C I S I O N
Mrs Michelle Giudes is the owner of land described as Lot 2 on Registered Plan 745349, County of Elphinstone, Parish of Coonambelah, containing an area of 2,054 square metres. Under the provisions of the Valuation of Land Act 1944 ("the Act") the respondent determined the unimproved value of that land as at 1 January 1996, at $250,000. Mrs Giudes objected against that valuation and following advice from the respondent that her objection had been disallowed, she appealed to the Land Court, advising that her estimate of the unimproved value was $175,000.
At the hearing of this matter the appellant was represented by Mr GW Eales, a registered valuer in practice in Townsville, who also gave evidence. The respondent was represented by Mr R Vize, of Counsel, while evidence for the respondent was given by Mr RA Noakes, a registered valuer employed by the Department of Natural Resources.
The subject land is situated at 4 Hale Street, Stanton Hill, an inner-city older residential area of Townsville, comprising a mixture of renovated Queenslander and colonial-style dwellings and modern and older units and flats. An outstanding characteristic of the Stanton Hill area is the views over Cleveland Bay, the Harbour and the City. It is within 500 metres of the Townsville Central Business District.
Although the subject land fronts both Hale and Denham Streets, access is from Hale Street, which is bitumen-sealed with concrete kerbing and channelling. Electricity, telephone, water and sewerage services are available.
The subject land is a large irregular-shaped allotment, situated below the level of Hale Street and falling easterly towards Denham Street, with a cross-fall from south to north. It has been extensively cut and filled to provide a building pad and grounds. Rock retaining walls have been used extensively. At the Denham Street frontage, the property is between 2 and 3 metres above street level.
The property is zoned "Residential 3" under the Townsville City Council Town Plan of September 1994. Although this zoning allows for development of units with Council consent, it is common ground that as the subject land is used for single dwelling house purposes, it must be valued under the provisions of section 17 of the Act and any enhancement in value because of potential use for any other purpose must be disregarded. The property is located within Precinct 4 of the Townsville City Council Development Control Plan No 2 - Melton, Stanton and North-East Castle Hill slopes. This Development Control Plan is intended, inter alia, to ensure any new development "sympathetically responds to the original architectural elements of the area".
Mr Eales produced a report and valuation contending for an unimproved value of $175,000 as at the relevant date. To support that valuation he referred to the sales of ten residential properties in the North Ward, Yarrawonga and Castle Hill areas, as there were no sales of vacant or lightly improved land in the vicinity of the subject land. Those sales occurred between July 1993 (No 3 Glamis Court, Yarrawonga, of 3967 square metres, for $155,000) and March 1996 (No 12 Queen Street, North Ward, of 1,948 square metres, $240,000, zoned "Residential 3"). However, the majority were mid-to-late 1995 sales of larger (1,000 square metres to 2,200 square metres) allotments which sold for prices between $70,000 and $165,000.
Mr Eales said that he had regard to the following attributes of the sales and the subject land: access, frontage, topography, useful component, shape, drainage, view, ease of construction, environment, prestige location and services.
The subject property is not listed under the Queensland Heritage Act 1992. However, the Townsville City Council has identified the home on the property as a historical building worthy of retention and preservation. It has been given provisional listing until a heritage data base is established by the Council.
Mr Eales contended that notwithstanding that the subject land must be valued as a single dwelling house site, an allowance should be made because the owner would be prevented from doing whatever she wants to do with the property by way of extensions and alterations, as the Council has made it clear that it wishes to retain such a significant building in what he termed, "its former glory". That allowance should incorporate the prospect that the property may in the future come under the Queensland Heritage Act. Although he admitted that the effect would be small, it was something that he thought a potential purchaser would take into account. He therefore adopted a 10% allowance for the possibility of future listing and the restrictions that such listing would bring. He admitted that he did not have any sales to prove his contention, it was a subjective judgment. If the land was unaffected by any heritage considerations, Mr Eales thought its unimproved value should be in the order of $195,000 to $200,000.
Mr Eales explained that there was some difficulty in valuing the subject land by comparing it with sales at Yarrawonga and Castle Hill, as those sales have the "major advantage" of being located in newly-developed residential areas, where there are no multi-unit developments in the immediate vicinity. On the other hand, the subject land is overlooked by two large unit complexes and is in an area where there are older "eyesore" developments.
Both the sales and the subject land enjoy good views. The view from the subject land is restricted to the north, but there are good views of the harbour and the city and the subject land has the advantage of location close to the city centre.
Mr Eales felt that the most comparable sales were his Sales Nos 6 and 9 which are situated in Glamis Court, Yarrawonga, with areas of 2,263 square metres and 3,967 square metres, which sold in July 1994 and July 1993 for $180,000 and $155,000 respectively. Both are large elevated sites, with useable areas similar to that of the subject land and with excellent panoramic views of the ocean and the city. However, the sales are steeply sloping and Mr Eales conceded that there would be additional building costs compared with the subject land. Although the subject land had some 2,000 square metres of mostly useable land, he pointed out that it had to be retained, as it sloped down quite steeply.
Mr Eales felt that his Sale No 7 was also comparable. It is situated in Braemar Crescent, Yarrawonga, has an area of 1,251 square metres and sold in December 1995 for $165,000. It is a large, elevated, irregular-shaped allotment, with a fall to the rear boundary, but with panoramic ocean views.
Those three sales are zoned "Residential 1". By way of contrast Mr Eales included as Sale 8, the sale of an allotment of 1,948 square metres, zoned "Residential 3", for $240,000, in March 1996. That allotment is suitable for development for nine units and in his opinion demonstrates a market for a fairly level unit development site close to the city. It is situated in Queen Street, North Ward.
Although Mr Eales included the details of several other sales, it is clear that they were used only as supporting evidence for the three principal sales.
I turn now to the evidence for the respondent.
In support of his valuation of $250,000, Mr Noakes relied principally upon five sales of virtually vacant land. His Sale No 1 is of a small 503 square metres allotment in Eyre Street, North Ward, which sold in May 1995 for $70,000. It is substantially inferior to the subject land and can be ignored.
His Sale No 2 is the land situated at 386 Stanley Street, North Ward. It has an area of 1,200 square metres and sold in March 1995 for $115,000. Mr Noakes described it as a large, regular-shaped, inside allotment in an elevated prestige locality, above street level and rising to the rear, with a west-to-east cross slope. It has an easterly aspect, with partly restricted panoramic views. Mr Noakes was of the opinion that the view, location and size of the subject land made it substantially superior to Sale 2, to which the respondent had applied an unimproved value of $100,000 as at 1 January 1996.
Mr Noakes' Sale No 3 (which is Mr Eales" Sale No 10) is the land situated at 345 Stanley Street, North Ward, has an area of 1,205 square metres and sold in May 1995, for $150,000. It was also described as a large regular-shaped inside allotment, but below street level and falling to the rear. It has partly obscured panoramic sea views, but poor access. Mr Noakes regarded it as considerably inferior to the subject land, the respondent having applied an unimproved value of $145,000 to the Sale 3 land as at 1 January 1996.
Sale No 4 is the land situated at 7 Braemar Street and was Mr Eales' Sale No 7. It has an area of 1,251 square metres and sold in December 1995, for $165,000. It was described by Mr Noakes as being a regular, inside allotment, below street level, with a steep fall to the rear and with panoramic views. He considered it to be inferior to the subject land because of its location, size and nature of land. As at 1 January 1996, the respondent had applied an unimproved value of $160,000 to that allotment.
Mr Noakes' Sale No 5 is the land situated at 13 Little Street, Belgian Gardens. It has an area of 2,046 square metres and sold in May 1996, for $265,000. He described it as a large, irregular allotment, with no street frontage, but with access from Eden Street. It falls to the rear and has a cross-fall from south to north, with restricted panoramic sea views. He considered it to be inferior to the subject land, because of its location, size and nature of land. This was an after-date sale, to which the respondent had applied an unimproved value of only $100,000 as at 1 January 1996. Mr Eales thought that this sale was zoned "Residential 3" and had potential for unit development. Mr Noakes also prepared a supplementary schedule of seven sales (Sales A to G) for the purpose, he said, of providing evidence of sales in the range of $200,000 to $250,000. Four of those sales occurred well before the date of valuation, in the period between July 1993 and December 1994, and were known to Mr Noakes at the time he valued the subject land. However, it seems that those sales were regarded as high, as the respondent applied unimproved values of $170,000, $160,000 and $160,000, from sale prices of $200,000, $180,000, and $194,000, respectively. In the case of the 1993 sale, Sale E, for $155,000, an unimproved value of $160,000 had been applied.
It would seem that Mr Noakes gained more support from the following after-date sales:•Sale D at 94 Yarrawonga Drive, North Ward, of 1,612 sq. metres, in November 1996, for $154,000 ($150,000 applied as at 1 January 1996).
•Sale F at 4 Arundel Court, Yarrawonga, of 1,239 sq. metres, in April 1997, for $280,000 ($170,000 applied as at 1 January 1996).
•Sale G at 3 and 5 Melton Terrace for 1,854 sq. metres in January 1997, for $280,000 (occupied by an old block of flats and so not valued as a single dwelling house site).
However, in my view, those supplementary sales do not support the valuation of $250,000 applied to the subject land. The earlier sales were generally applied conservatively and well below $200,000. Only the 1997 sales (Sales F and G) and Sale 5 in May 1996, were for prices near the unimproved value applied to the subject land. However, at the date of valuation the respondent considered that they had unimproved values well below their sale prices, applying only $170,000 and $100,000 to Sale F and Sale 5 respectively. Sale G is zoned "Residential 3", and while it seems that it may have been purchased with the intention of constructing a single dwelling house, it is common ground that with Council approval it could be developed for units. The sale price of $280,000 would reflect that potential, rather than its value as a single dwelling house site.
That leaves Mr Noakes with his original sales. The only conclusion that he can validly draw from the sales on his supplementary schedule, is that the sales as a whole show consistently higher prices with higher elevation, which provides wider and better panoramic views.
I turn now to consider the issues between the parties. They are, first, should any allowance be made for provisional listing by the Council, or for the possibility of future listing under the Queensland Heritage Act or similar legislation, which might affect the owner's right to extend, alter or renovate the house? That issue can be disposed of shortly.
The onus of proving any such effect is upon the appellant. In order to prove that effect, the appellant must demonstrate by means of sales evidence that the provisional listing, or the possibility of future listing, would be something that would adversely affect the price that a potential prudent purchaser would pay for the property. It must also be demonstrated that it would affect the unimproved value, rather than the value of the house. In this case the appellant has failed to prove either proposition and the unimproved value falls to be determined in the usual manner.
The second issue between the parties is whether or not the unimproved value of $250,000 applied to the subject land as at 1 January 1996, can be supported by sales evidence. Mr Eales contended for an unimproved value of $175,000. On the other hand Mr Noakes valued the land at $250,000, principally because of its location close to the city centre and its views. He relied heavily upon several sales for over $250,000 and the superiority of the subject land to other sales for less than $200,000, but which had unrestricted panoramic views, the sales being steeper and their building costs greater. He emphasised that the Yarrawonga and Castle Hill sales are not as well located.
However, Mr Eales argued that although well-located, the subject land is in an area of increasingly intensive development, already overlooked by two blocks of units. The single dwelling house residential amenity of the area has largely been lost.
Of the sales evidence advanced by Mr Noakes, only three sales are in excess of $200,000, and none of them was known to him at the date of valuation. Sale 5 took place less than five months after the date, but the respondent had applied only $100,000 to that allotment, clearly demonstrating the opinion that it was vastly inferior to the subject land. Similarly, Sale F for $280,000 occurred some 15 months after the date, but at the relevant time the respondent had applied $170,000 to that land, again signalling that it was considered inferior to the subject land. I will disregard Sale G, as I accept Mr Eales' evidence that the price paid was in conformity with its potential for unit development. It is therefore suspect for the purposes of comparison with the subject property, which must be valued under section 17 of the Act as a single dwelling house site.
I cannot accept Mr Noakes' comparisons with the sale prices of Sale 5 and Sale F. As at 1 January 1996, the valid comparisons are with the values applied to those allotments, not the prices at which they later sold. What those later sale prices demonstrate was not proven. They may simply be high sales. They may show that the respondent was wrong in his application of unimproved value in 1996. Alternatively, they may be the beginning of a trend towards a higher market for properties with panoramic views. If this proves to be the case, the respondent can take the appropriate action in future valuations. For present purposes, however, the respondent has determined a relativity of values from the sales that were available at the time.
Having regard to the other sales, I have come to the conclusion that the unimproved value of $250,000 applied to the subject land is not supported. However, having regard to its size and location and to the views available, the unimproved value of $175,000 contended for by Mr Eales, is far too conservative. In my opinion, the sales evidence, and the values applied to those sale lands, indicates that an unimproved value of a little over $200,000 as at 1 January 1996 would be appropriate. The positive attributes of the subject land make it more valuable than the Yarrawonga sales, but the negative aspects of its environment and amenity must be taken into account.
Accordingly, the appeal is allowed, the valuation of the respondent is set aside and the unimproved value of the subject land is determined at Two hundred and ten thousand dollars ($210,000).
President of the Land Court
0
0
0