Stephen v Chief Executive, Department of Lands
[1996] QLC 45
•23 April 1996
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BRISBANE
23 APRIL 1996
Re: An appeal against an unimproved valuation -
Valuation of Land Act 1994 -
AV94-0301 -
Local Authority/Division: BCC-Windsor
Date of Valuation: 30 June 1993
Valuation appealed against: $150,000
Appellant's Estimate of Value: $117,000
Graham D Stephen
v.
Chief Executive, Department of Lands
D E C I S I O N
Mr Stephen owns land situated at 81 Main Avenue, Wilston, described as Lots 60 and 61 on RP 19877, Parish of Enoggera, County of Stanley, containing an area of 809 m2. It is zoned "Residential B-R3" but developed with a single unit dwelling.
The grounds of the appeal were broadly that the valuation of $150,000 was excessive particularly in comparison with the previous valuation of $94,000; inflated by purchases by wealthy investors; the cause of unwarranted hardship to, in particular, senior residents with limited resources who wished to remain in the area; adverse effect on residential use caused by local development and the consequences of that.
Mr Stephen attended the hearing and tendered a statement embodying most of the grounds of appeal. The land is surveyed with northerly aspect to the street which is a split-level divided road. The slope of the land is fairly steep to the rear (south). There is no view to the north where the aspect is to a "stone wall and over grown embankment". There is no view to the west, the outlook being dominated by the high profile of a "6-pack" block of flats with two floors of accommodation units over garages. This building is not well managed according to Mr Stephen and the owner is absentee. It is separated from the subject property by a rental home on a 405 m2 site. Five of the six balconies to the flats overlook the house on the subject land. Immediately to the east is another dominating "6-pack" block of flats of which the western windows overlook the subject property. Both blocks of flats "extend to twice the depth" of Mr Stephen's house and together with the effect of the location of trees growing on the adjoining rental house land, he says the scope of view from his house is limited to an arc of less than 900 being from the south-east to the south-west. Mr Stephen described the generally southerly views as extending to the city skyline albeit with some interference from trees to the south and then to part of Mt Coot-tha.
Mr Stephen has done some research into sales of houses in the locality at about the date of valuation and also subsequent to that date. The range of prices of the houses sold in the 1993/94 period was from $158,000 to $205,000 averaging $171,000. Advice sought from real estate agents as to the potential selling price of his property suggested to him an average opinion of $181,000. He has been advised that if he was forced to sell, the most likely market would be for redevelopment as zoned, when he would expect a sale price in the range of $160,000 to $180,000. However even at the lower end of that range the accommodation density possible under the zoning, would, in his opinion, prove redevelopment to be uneconomical. On his analysis, the added value of his two bedroom, 90-year-old cottage was about $84,000 and even on the 1 January 1995 unimproved value of $144,000, he calculated that he would have to sell the property for $228,000 when its true value on more recent house sale averages was about $176,000.
The valuation appealed against was carried out by Mr. I.G. Savage, registered valuer employed by the Department. He was well aware of the nature of development in the locality of Mr Stephen's property. The valuation in fact had been reduced, on objection, to the amount appealed against, as a result of specific matters raised at the time of objection by Mr Stephen. In Mr Savage's tendered report, reference was made to the slope of the land as described by Mr Stephen and to the divided split-level construction of Main Avenue. He had described the views to the south extending from "the Story Bridge & Mt Gravatt in the east to the CBD, Red Hill and in the west, Mt Coot-tha". He had difficulty in accepting that the arc of view was quite as narrow as described by Mr Stephen. He maintained that because of the slope the view could not be built out. He agreed that some interference might be possible from trees on land to the south but not to the degree that the view could be regarded as being built out.
The valuation of Mr Savage was based on two sales of vacant lightly improved land.
One sale was of a site directly opposite to the north on the higher side of Main Avenue at No. 82. The "Residential A" zoned land also containing 809 m2 had been sold in February, 1993, for $340,000 showing an analysed unimproved value of $335,000. The valuation applied at the same relevant date was $280,000. The property, with a removal house ($1,000) had been previously sold for $267,500 in May, 1992. The sale land is described as very well elevated, with moderate to steep forward slope (9 metres in 40 metres) overlooking the subject land with south-easterly to south-westerly and also north-westerly views. Mr Savage in comparing the sale land with the subject described it as being higher in elevation, steeper, but with better views, adjacent to dwellings on either side with a park at the rear and as being overall superior. The land had been capable of sale in two lots and his inquiry of the purchaser indicated that while that potential was a consideration, the purchase had been for the construction of a single dwelling. Mr Savage thought the sale price had been a "good" price for the vendor but not to the degree that it was above the top of the range indicated by the market for prime sites. He said that in comparison, that sale land had previously been valued at $97,000 while the subject had been at that time valued at $94,000, indicating the significant alteration which had taken place to the previously existing relativity - due to the market trends which had since become exposed.
The second sale was of a small site of 405 m2 at 23 Fifth Avenue, in a location close to unit development and a busy road. It sold in May, 1993 for $86,000 showing an analysed unimproved sale of $84,000. The applied value was $77,000. The land was zoned "Residential B-R3", but due to its size the land had no potential for unit development. The sale land was not as steep as the subject, but had significantly inferior views and only half the size. It was located directly opposite the T-junction of Eighth Avenue. In comparison, the 405 m2 block adjoining the subject land to the west had been valued at $95,000.
Apart from the particular dominance of the two flat buildings, as their presence affected the subject land, Mr Savage felt the social problems in the locality as mentioned by Mr Stephen and including the existence of a youth detention centre in Fifth Avenue to the east, were common to the locality, including the sale lands.
Mr Stephen was aware of the first sale used by Mr Savage. His estimate of an unimproved value of $117,000 for the subject land had, he said, taken that sale into consideration.
It is clear that Mr Stephen's property has become located in an area where the effects of past and present zonings have caused denser population and types of development deleterious to the enjoyment which might be expected of quieter and more private suburban single-unit residential properties. As a long-term owner-occupier who does not wish to relocate, Mr Stephen sees the escalation of land prices and, as a consequence, statutory valuations and charges based on those prices "which only the wealthy are able to outlay" as being of no benefit to owners such as himself and entirely external to his influence or control.
He believes that "it would be hard to devise a more inequitable system as it ensures that those with greater means set the rating levels of those with fewer".
It is of no consolation for Mr Stephen to hear that if his property was not dominated by the obvious interference to quiet enjoyment of his residence caused by adjacent and nearby developments, his valuation would, it seems, be considerably higher. The reason is that the property with all its other disadvantages, does have the elevation and type of view which buyers with means now find attractive. The Valuation of Land Act 1944 (the Act) at least gives some valuation relief to single-unit dwelling property which, in this particular case, excludes any potential the land may have for unit redevelopment or alternatively for the sale of two surveyed parcels. Mr Savage's valuation was carried out in accordance with s.17(1) of the Act which provides:"In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house ... any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded irrespective of whether or not, in case of potential use as aforesaid, that potential use is lawful when the valuation is made."
Once those potentialities are notionally removed however, the Act is quite specific in its definition of unimproved value, as contained in this case in s.3(b). On the assumption that the land was one surveyed parcel zoned "Residential A", but otherwise in its existing environment, the unimproved value is:
"the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist."
The Department and this Court, and indeed Mr Stephen are bound by that legislation in this matter. The evidence provided to the Court by Mr Savage while not ideal is the best that is available. He has then used his professional experience in comparing the subject land with the land involved in the sales. His evidence is preferred to the valuation opinions of Mr Stephen. It seems reasonable to state that, had the artificial qualifications controlling this valuation actually applied at the date of valuation then Mr Stephen should have expected the property (even if he had no intention of selling), to have had an unimproved market value of $150,000. An even greater unimproved market value would have been realistic had the artificial qualifications in s.17(1) of the Act been removed.
The appeal is disallowed for these reasons, and the valuation of the chief executive affirmed.
R E Wenck
MEMBER OF THE LAND COURT
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