The new City of Cape Town General Valuations were made available to the public in February, causing shock and distress to many homeowners. Anecdotes of increases in excess of 50% have been circulating on social media, with the City reporting average house price growth of 34% between its 2015 and 2018 valuation cycles.
While the City welcomes objections and is committed to correcting proven instances of overvaluation, the time for objecting is fast running out. Hand-delivered objections will only be accepted until the end of March, and the online objection process – the only other option available to property owners – closes on 30 April 2019.
“We have a very small window in which to make sure our valuations are fair and reasonable,” says Schalk van der Merwe, Franchisee for the Rawson Properties Helderberg Group. “I can’t stress enough how important it is to take advantage of this opportunity – these valuations will affect your rates for years to come.”
Van der Merwe says his Rawson offices have been inundated with requests for comparative professional valuations and have found properties overvalued by up to 30% in some cases. In these situations, he says the complementary valuation report and comparative market analysis provided by Rawson agents is exactly the kind of supporting evidence the City requires to substantiate objections.
“It’s not good enough to simply state that your home has been overvalued,” he explains. “The objection process requires motivation in the form of comparisons to similar properties sold in your area in mid-2018 when the official valuations were done. It can be very difficult to get a hold of this information as a private individual, which is where our Rawson agents come in. We have extensive, first-hand market data for the 2018 period, and are only too happy to help members of our community out with an accurate and persuasive valuation report.”
Van der Merwe does caution homeowners not to expect municipal valuations below market value, however.
“A lot of property owners are still under the impression that municipal valuations should be lower than market value,” he says. “This may have been the case in the past, but those discrepancies have largely been corrected over the past two valuation rolls. Your latest valuation should be a reasonable reflection of what you could achieve on the open market – but that might be higher than you were expecting if you haven’t had a valuation in a while.”
According to FNB, the cumulative five-year house price growth in the City of Cape Town between Q2 2013 and Q2 2018 was an astounding 78.2%. Somerset West, Strand and Gordon’s Bay came in only marginally lower at 62.5% – enough to add a significant margin to the sticker price on your home.
“We’ve been really fortunate to have such strong growth in the Western Cape, but it can be a double-edged sword at valuation time,” says Van der Merwe. “Thankfully, a 30% valuation increase doesn’t necessarily mean a 30% increase in rates – valuations are used for proportional rates distribution rather than a one-to-one increase.”
Property owners who have not yet received their valuation notification by post can find the relevant information on the City of Cape Town website, along with links for filing an objection online.
“If you’re not sure whether the value is reasonable, play it safe and get a professional valuation done,” Van der Merwe advises. “It’s a complimentary service, so you have nothing to lose and potentially everything to gain.”