The Real Estate Institute of Victoria (REIV) yesterday published an article claiming that Victorian residential property values surpassed $1 trillion for the first time in 2012:
Property is a significant part of the Victorian economy and holds a large portion of the state’s overall wealth.
This is documented every two years by the Victorian Valuer General as part of the rating process for every Victorian property. The values that are established allow municipal councils to determine properties rates and the state government to set land tax liabilities.
In 2012 the Valuer General found that the combined value of the states’ 2.3 million residential properties was $1.083 trillion. This represented an 11 per cent increase on the $978 billion recorded in 2010 and was also the first time the trillion dollar mark had been passed…
So according to the Victorian Valuer General, the average residential home in Victoria is valued at around $471,000 in 2012 – an expensive proposition given that this figure includes some 27% of households living in regional and remote locations.
Another interesting aspect of the Valuer General’s report is that it contradicts the Australian Bureau of Statistics land valuations, which estimated that Victorian residential land values peaked at $897.9 billion in June 2010 before declining by -6.4% to $840.0 billion as at June 2012 (see below chart), as well as the steady decline in housing prices over this period.
The Valuer General wouldn’t provide an inflated valuation in order to support local councils’ bid to raise property rates, as well as enabling the state government to raise land taxes without adjusting thresholds would it?