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Burwood Final Report 2015

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Burwood Final Report 2015 Independent Property Valuers & Consultants ACN: 099 913 210 ABN: 80 099 913 210 Suite 5, Level 1, 2 East St Five Dock NSW 2046 PO Box 697 Five Dock NSW 2046 Phone : (02) 9713-9077 Fax : (02) 9713-9022 Email : [email protected] Web : www.savs.com.au FINAL REPORT REVALUATION PROGRAM DISTRICT 137 - BURWOOD BASE DATE - 1 JULY 2015 Prepared by SOUTHERN ALLIANCE VALUATION SERVICES PTY LTD For VALUER GENERAL & DEPARTMENT OF LANDS Burwood Final Report 2015 TABLE OF CONTENTS EXECUTIVE SUMMARY ....................................................................................................... 3 1.0 GENERAL DESCRIPTION OF LOCAL GOVERNMENT AREA.............................. 6 2.0 NUMBER OF VALUATIONS IN THE ZONE CATEGORIES. ................................... 9 3.0 TOWN PLANNING & ZONING INSTRUMENTS. ..................................................... 13 4.0 IDENTIFIED SIGNIFICANT CHANGES IN USE OR DEVELOPMENTS OF PROPERTY AND OTHER FACTORS WHICH MAY AFFECT VALUATIONS. ........ 16 5.0 ADDED VALUE OF IMPROVEMENTS. ..................................................................... 17 6.0 CHANGES TO COMPONENTS ILLUSTRATED BY CHANGES TO THE EXISTING VALUE RELATIONSHIPS. ............................................................................. 26 7.0 MARKET COMMENTARY. .......................................................................................... 32 8.0 MANAGEMENT OF COMPONENTS, HANDCRAFTING & VERIFICATION. ... 35 9.0 QUALITY ASSURANCE................................................................................................. 36 INCLUSION: Annexure ‘A’ - Ashfield DA Register Annexure ‘B’ - Ashfield Analysed Sales List Annexure ‘C’ - News Articles Burwood Contract Southern Alliance Valuation Services Pty Ltd – Burwood Final Report – BD 1 July 2015 Page 2 of 39 Burwood Final Report 2015 EXECUTIVE SUMMARY All properties in NSW are valued each year for rating and taxing purposes. All valuations are issued to the Office of State Venue for land tax. Valuations are also issued to councils either each year or every 2nd, 3rd or 4th year. This report details the land valuation programme for the Burwood Local Government Area (LGA). The majority of values are determined using mass valuation techniques. The Valuer-General’s mass valuation system is applied as follows: 1) Properties that react to market forces in a similar way are grouped together in a component, AND 2) The existing values of those properties in a component are updated by a market-based factor that is then used as a multiplier of the prior Land Value. The result is then checked by the Contract Valuer and individually verified values applied as appropriate. The use of mass valuation techniques does have limitations, particularly over a period of time. The continued application of factors may lead to a distortion in the relativity of values within a geographical area. Some types of properties are so few in number or likely to be so sensitive to localised changes that individually verified values is the only appropriate method. Although a mass valuation system is used to determine the majority of land values, the Valuation of Land Act requires that each land value be a market value. Each land value must be capable of being tested and supported on its own against all available market evidence. The total number of valuation entries (as at 31/10/15) within Burwood LGA – 7,775. The sum of land values in dollars (as at 31/10/15) within Burwood LGA - $9,367,430,360 The last local government base date or year when the valuation notice was issued was for Base Date 1st July 2013. The total land value for Base Date 1st July 2014 was $7,164,367,450 which represents a percentage change of 30.8%. The change in values reflects a high increase in the movement of all residential land values as well as extremely high increases for most commercial property within the Burwood LGA based on market sales evidence. Certain areas within Sydney’s metropolitan area have reported high increases in value (Inner-west, Eastern Suburbs and the Lower North Shore) whilst others have reported similar high increases or medium to high increases in value such as Western, North-western and South-western suburbs. The number of desirable properties including those within close proximity to services and amenities, the number of underdeveloped sites, the increasing rental returns on residential investment property within middle ring suburbs, the concentration of certain ethnic groups within the municipality and the demographics of the area in general, are all reasons that have assisted the increase in land values over the past year. This follows, on average about 16.2% increase between the 2013/2014 base years and an overall increase from 2013 to 2015 of 51.9%. Southern Alliance Valuation Services Pty Ltd – Burwood Final Report – BD 1 July 2015 Page 3 of 39 Burwood Final Report 2015 EXECUTIVE SUMMARY. (Continued) Residential – Overall the residential market within the Burwood LGA, as at 1st July 2015, increased in line with other inner-city and inner-west suburbs of Sydney within a range of 5 -10 kilometres of the CBD. On average, residential lands depending on locality, moved within a band of 25% to 45% between Base Date 1 July 2014 and 1 July 2015. The rates of increases varied from strong growth of 20% – 30% for single residential property and even higher increases for medium to high density property from 30% to 50%. From analysis, the localities which showed the greatest increases included property close to good transport and amenities such as schools and shops, as well as large underdeveloped sites. Pockets of areas and suburbs with lower median values increased generally at the high end of these results, as property here proved more affordable whilst in comparison areas with higher median values increased at the lower end of this spectrum of movement. Commercial / Retail – The retail property market within the Burwood LGA over the prior general valuation program remained buoyant which has been underpinned by low vacancy rates and steady rental growth. Many quality sites available for sale either through private holdings or public, i.e. community assets, helped maintain this market momentum. Burwood’s Local Environmental Plan 2012 greatly increased the underlying values of many of the centre’s sites by increasing their theoretical development potential by the introduction of a more varied land uses and setting greater height limits and floor space ratios. This lead to a particularly active commercial property market over the preceding three years, to Base Date 1st July 2015. This growth was characterised by property consolidations, land banking activity and redevelopment generally and involved any commercial property capable of a sizable residential component. This trend is expected to continue unabated for the short to medium term particularly as many of this sales activity is supported by the underlying strength of the residential market in general but particularly by the demand for apartments. Sixty-one (61) commercial properties were analysed generally reflecting higher but varied outcomes. Housing affordability has had less impact generally on residential values within the Burwood LGA than has affected other more outlying areas of Sydney with the possible exception of some parts of Enfield & Croydon Park. Suburbs with lower median values recorded greater increases in comparison to the higher valued areas which may be partly explained by availability of redevelopment stock and property in these areas showing better value. Unlike the stock-market, any impact upon the real estate market is dependent on consumer confidence, employment security and any regulatory/monetary policy changes. Evidence investigated suggests that rental markets during the year remain extremely tight with undersupply leading to unprecedented vacancy factors for residential property. Similarly, although the overall quantum of sales transactions remained low, increased first home buyers activity and increased activity by developers and investors alike, the demand for housing in the Burwood LGA remained high. Hence in the short to medium term value levels are expected to hold. Southern Alliance Valuation Services Pty Ltd – Burwood Final Report – BD 1 July 2015 Page 4 of 39 Burwood Final Report 2015 EXECUTIVE SUMMARY. (Continued) TABLE OF TYPICAL VALUES Component Size % LOCATION 2014 LV 2015 LV Code (m2) Change Croydon EFF 733.96 $969,000 $1,180,000 +21.8% Burwood (Central) EFF 776.9 $1,180,000 $1,430,000 +21.2% Burwood Heights EGG 689.2 $942,000 $1,140,000 +21.0% Burwood (Appian EHH 1,416 $2,020,000 $2,440,000 +20.8% Way) RESIDENTIAL Croydon (North) EJJ 531.1 $790,000 $1,000,000 +26.6% Enfield ESW 644.9 $692,000 $844,000 +22.0% Croydon Park ESE 607 $806,000 $983,000 +22.0% Burwood Rd (Prime) CAP 151.8 $2,070,000 $2,750,000 +32.9% Burwood Rd CAS 132.8 $1,240,000 $1,600,000 +29.0% (Secondary) BUSINESS Croydon (The Strand) CFF 213.3 $518,000 $650,000 +25.5% George Veris Burwood Area Manager Southern Alliance Valuation Services Pty ltd Southern Alliance Valuation Services Pty Ltd – Burwood Final Report – BD 1 July 2015 Page 5 of 39 Burwood Final Report 2015 FINAL REPORT DISTRICT (137) – BURWOOD 1.0 GENERAL DESCRIPTION OF LOCAL GOVERNMENT AREA. Burwood Local Government Area (LGA) is situated in the inner western suburbs of the Sydney metropolitan area. Burwood LGA otherwise known as Burwood City Council commences some eight (8) kilometres west of Sydney CBD and stretches approximately three (3) kilometres from Croydon at its
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