NSW - How are UCV (unimproved land values) values calculated?

Discussion in 'Property Market Economics' started by scientist, 27th Jun, 2021.

Join Australia's most dynamic and respected property investment community
  1. scientist

    scientist Well-Known Member

    Joined:
    23rd Jul, 2015
    Posts:
    841
    Location:
    sydney
    Does anyone have insight of the process of how the valuing land for rates purposes occurs?

    I have two guesses. First is its done by council area - first they work out how much rates income the council needs, divided by the number of habited m2 in the council area, then adjustments are made according to things like desirability, zoning (r2, r3, b6 etc) so that owners of nicer and larger plots are paying proportionally more.

    The second, more naive guess is, a team of valuers go around and genuinely tries to work out the market value of the land. But I really doubt this.

    If the first guess is more correct, it might lead to interesting situations where a boundary street between two council areas might have largely different UCVs for similar plots of land depending on which side of the street you're on, which is actually the case I've observed on some streets in Sydney.

    Just curious.
     
    scientist, 27th Jun, 2021
    #1
  2. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,224
    Location:
    Sydney or NSW or Australia

    A about T. Councils get the UCV from the SVO. They then adjust the % to meet their needs. If needs exceed CPI, then council applies to IPART for a larger increase.

    The SVO uses bulk valuation methodologies (statistical analysis) to derive land values based on sales data.

    In built-up or established areas, where there are few sales of vacant land, they use additional analysis including applying a scarcity factor if there are insufficient sales of greenfield sites for comparison.
     
    Scott No Mates, 27th Jun, 2021
    #2
    scientist likes this.
  3. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    14,004
    Location:
    Brisbane
    This may not help your question about NSW, but about 23 years ago I was home one day and someone was walking our street, on a ridge line with city views (but only vague glimpses through trees and over roofs from our block).

    We got talking and he said he was walking the ridge line to see what the views were like, all to do with the new UCV valuations. I said "please come in and see that we don't have a view" and showed him around to the back yard.

    We were in a good area, with many houses having fabulous views, and he was checking views as best he could, and obviously some like me were happy to show him we didn't have views, rather than him assume we did (which clearly what he thought).

    So it certainly is not just looked at from a map, or at least wan't the case in Brisbane back then. It was quite thoroughly investigated, especially those streets that had views.
     
    Last edited: 27th Jun, 2021
    wylie, 27th Jun, 2021
    #3
    scientist likes this.