Watson v Chief Executive, Department of Lands
[1996] QLC 16
•21 February 1996
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BRISBANE
21 FEBRUARY 1996
Re: AV95-224 - An Appeal against an Unimproved Valuation
under the Valuation of Land Act 1944
Local Authority: Whitsunday
R.H.C. & M.J. Watson
v.
Chief Executive, Department of Lands(Hearing at Bowen)
D E C I S I O N
As at 1st January, 1995, the unimproved value under the Valuation of Land Act of land described as Lot 4 on Plan S9466, County of Herbert, Parish of Conway, containing 710 m2, was assessed in the amount of $200,000. The land is located at No. 13 Warrain Street, Shutehaven. It is zoned "Residential A" and accommodates a dwelling.
The appellants were represented at the hearing by Mr B. Conroy, valuer in private practice. The valuation contended for was $150,000. Mr Conroy described the land as being below the level of the street falling to the rear. He described the views as being "good sea views over the Whitsunday Passage". Mr Conroy in his valuation report referred to four sales as follows:(1)Lot 6 Plan S9466 - 678 m2 - 7.11.93, $215,000 - Warrain Street - described as superior to the subject land - applied unimproved value $215,000.
(2)Lot 11 Plan S9466 - 746 m2 - 4.3.94, $195,000 - Warrain Street - described as comparable to marginally inferior to the subject land - applied unimproved value $190,000.
(3)Lot 24 Plan S9464 - 564 m2 - 9.5.94, $230,000 - Harbour Avenue. Mr Conroy's written remarks were as follows -
"The sale site has been levelled for half its depth and a 20 metre long stone retaining wall built. Excellent ocean and island views to the north and south. The sale analyses to show $200,000. The sale is far superior to the subject. "
The applied unimproved value was $210,000. Mr Conroy said that his inquiries indicated that the site improvements had cost $42,000 although he had adopted an added value of $30,000.
(4)Lot 1 Plan S9464 - 570 m2 - 1.8.95, $122,500 - Harbour Avenue - described as a steeply sloping site with views over Shute Harbour, inferior to the subject - applied unimproved value $145,000.
The thrust of Mr Conroy's evidence was that in his opinion Shutehaven land values had increased through 1993 then peaked in early 1994, plateau'd for a period, then declined after about mid-1994. The fourth sale, above, whilst well after the relevant date was intended to show the extent of the decrease in comparison with the valuation that had been applied by the Department.
The valuation appealed against had been carried out by Mr G.W. Clacher, a valuer also in private practice but engaged by the Department on a contractual basis. Mr Clacher agreed that since the relevant date of valuation there had been a decline in the local real estate market. However, where he disagreed with Mr Conroy was the sequence of market activity leading up to the date of valuation. In his opinion the market had peaked in mid-1994 and then with the increased interest rates which occurred in August/September of that year, sales volume had dropped off and prices plateau'd through at least to the date of valuation.
Mr Clacher had relied on the only two sales which had occurred in Shutehaven during 1994. Those were Mr Conroy's Sales 2 and 3. Mr Clacher was confident that the subject land was slightly superior to Sale 2, all things considered, but particularly because of the superior north-easterly Whitsunday Passage views available from the subject. Both the subject land and Sale 2 widened to the rear in the direction of the available view but from Sale 2 this was generally to the south over the entrance to the harbour and was somewhat limited to the east. Mr Conroy's Sale 3 was smaller in area and did not widen to the rear towards the available view and Mr Clacher held the opinion that in its natural state the site was physically superior having in addition to its near comparable views, a narrow ridge feature at the frontage before falling steeply whereas the subject land was all relatively steeply sloping. Mr Clacher had analysed that sale by allowing $5,500 as the added value of the site works which included a stone-pitched retaining wall on part of the northern boundary. He had calculated that the retaining wall contained a surface area of about 20 m2 and applied an added value to it on that basis.
Mr Clacher, in my assessment of the verbal evidence, had analysed the second sale above (his Sale No. 1) with a more reliable approach to the added value of the improvements. He had valued what he saw. Mr Conroy on the other hand had accepted what he said he had been told was the cost of the improvements and then depreciated that amount "due to the falling market" although, as I understood his evidence, the market at the date of that sale was still in plateau. In any event whether the added value of the improvements would depreciate with the falling market is a question of opinion. Mr Conroy offered the opinion that he had considered the site improvements not to be overly expensive, because of the recognised added cost of construction at Shutehaven. Nevertheless I would require a far more detailed analysis before the stated cost would be seen to be realistic - particularly on Mr Clacher's assessment.
The second point is the different appreciation of the market which existed at the date of valuation. This had to be, in the absence of evidence, a matter of opinion, but again on my appreciation of the evidence, Mr Clacher's approach particularly as it referred to the effect of interest rates seemed logical. It is not in dispute that the market fell since the relevant date - the degree of decline no doubt an argument for another day.
In the meantime, I do not see that Mr Clacher has been over-zealous in his application of values to the sale properties or on a relativity basis to the subject land.
The appeal is dismissed and the valuation adopted by the chief executive is affirmed.
RE WENCK
MEMBER OF THE LAND COURT
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