Evans v The Valuer-General [1992] QLC 317

Re: Determination of Unimproved Value - City of Brisbane. Division of Stephens. AV91-857 IJ and AMV Evans v. The Valuer-General DECISION LAND COURT, BRISBANE. 26th June, 1992. This is an appeal against the determination by the Valuer-General of an unimproved value of $300,000 for Lot 2 on RP 82794, Parish of Yeerongpilly containing an area of 2590 m 2 . This is a "Residential A" zoned site situated at 107 Kadumba Street, Yeronga. The relevant date for the determination of the unimproved value is 31st March, 1990 and the appellants contend within the notice of appeal for an unimproved value of $181,000. The conduct of the appellants' case was in the hands of registered practicing valuer David Rees Thomas. It is Mr Thomas who values the land at $181,000. More about his valuation later. At the outset of the case Mr Thomas asked that the evidence of a general nature furnished in other appeals conducted by Mr ML Tighe be considered in this case. No objection to this course was raised by the respondent Valuer-General. As a result, I feel it is desirable to attach to this decision a copy of my general [1992] QLC 317 -- 1 of 6 -- - Page 2 - remarks and observations prepared as a background when I had for my consideration a number of other appeals in the Yeronga District. These remarks and observations should be read as one with this decision. Ian Joseph Evans furnished evidence in the case. Mr Evans told us that the appellants have a special interest in historic houses and that their business is in publishing books on restoring old Australian homes. He transferred his business interests to Brisbane from Sydney and during 1988 he made many trips to Brisbane in an endeavour to buy such a house. Several areas were of interest. The house at 107 Kadumba Street was purchased as the appellants were greatly attracted by the dwelling house. It was in an ideal position, the site was large and level. Mr Evans says that he was under a great deal of pressure to buy the house as he did not want to rent other premises for a short period. As a result, he says he and his wife paid a high price for the property ($650,000) in order to forestall an auction which was planned to occur. Mr Evans describes the dwelling house at 107 Kadumba Street as being one of exceptional quality in terms of its scale and heritage features. It was built in 1914. It is unusually large with 5 true bedrooms on a beautiful block studded with very large old trees. Other features of the home include a billiard room with built in pier glass, verandahs 5.5 metres wide and 12 metres long. Mr Thomas values the subject site at the rate of $70/m 2 • He describes it as a slightly irregular, rectangular shaped allotment having a dog legged frontage of about 34 metres and an average depth of 75 metres. It has a gentle even rise from the frontage to the rear and provides and excellent building platform. Mr Thomas says that the site is elevated but does not possess views of any significance. -- 2 of 6 -- - Page 3 - Mr Thomas informed the Court that the average sale price of an average sized lot of 809m 2 appears to suggest a per square metre value of $90 - $100 depending upon the location, typography etc. He informed the Court that it has been his experience that larger than average size lots (as is the subject) attract a marginally higher value but certainly do not increase in value in direct proportion to relative size. Mr Thomas has not been able to unearth any comparable sale of vacant land in Yeronga upon which to base his valuation. He did locate a sale of a similar property as 4 Holmes Street, Toowong on 23rd February, 1990 for $745,000. The area of this site is 2261 m 2 • It has been developed with a very large quality timber colonial home in good condition and similar in size to the house at 107 Kadumba Street. The Holmes Street site is moderately elevated and is nearly at the crest of a hill, but although it is located a similar distance from the Brisbane River as is the subject property, it also has no river outlook. Mr Thomas points out that the Holmes Street property enjoys similar advantages as to size and proximity to the city as does the subject property, and he says that the Holmes Street area of Toowong is every bit as, if not more, prestigious than the suburb of Yeronga. Mr Thomas has established that the Valuer-General's valuation of the Holmes Street land (Lot 2 on RP 95677 Parish of Enoggera) as at 31st March, 1990 is $155,000 ($68.55/m 2 ). This, in reality, is the support for Mr Thomas' valuation of the subject property and he says that in fairness and equity, he cannot see the valuation of the subject land as being relative to that of 4 Holmes Street, Toowong. Mr Thomas has not analysed the sale of the 4 Holmes Street, Toowong property. He agrees with Mr Evans that the purchase price of the subject land was high, -- 3 of 6 -- - Page 4 - probably by in the order of $100,000. The valuation under appeal was made by registered Departmental valuer Ian Geoffrey Savage who describes the nature of the subject land as being an elevated block on the southern end of and on the top of a ridge, with a very slight fall to the road. Mr Savage values the land on the basis of the following sales evidence:- Lot 2 on RP 115205, Parish of Yeerongpilly containing 549 m 2 on 9th April, 1990 from Matthews to Wikman for $83,000 - analysed unimproved value $77,350 - applied unimproved value - $65,000. Situation Feez Street, Yeronga. Mr Savage considers the subject site to be superior because of its size and shape. The sale lot is basically level having a general cross slope to the south and no outlook. It is triangular in shape. Lots 26 and 27 on RP 37281, Parish of Yeerongpilly containing 1214 m 2 sold from Vance to Maxon on 26th June, 1990 for $140,000. Mr Savage analyses this sale to show an unimproved value of $146,000 after adding to the purchase price the cost of demolition of a house. He has applied an unimproved value of $100,000 to this site, which is situated at 20 Grimes Street, Yeronga. It has an easterly aspect as falls gently from the rear. It is on a dead end road with a north easterly suburban outlook. Mr Savage considers the subject land again to be superior to the sale land due to its larger area and better position. Mr Savage has analysed the sale of the subject property. He has done so as he also found difficulty in obtaining satisfactory and comparable vacant sales evidence. The sale analysed to show an analysed unimproved value of $410,000 - considerably in excess of his applied unimproved value of $300,000. He inspected the improvements on the subject land after a notice of objection to a former -- 4 of 6 -- - Page 5 - valuation of $480,000 was lodged. Mr Savage has valued the dwelling house on the subject land using the added value concept after examining sales of properties at Chelmer. He agrees that the price paid for the subject property is too high. Now it is obvious that the subject site is a difficult one to value principally due to its relatively large size. It is no doubt an excellent parcel of "Residential A" land albeit without views of any note. Normally it could be expected that the sale of the subject property would constitute the best basis of valuation, but in this case there are problems, not the least, of course, being that it is a sale of a fairly highly improved property and it is well established as a principle of valuation that the use of highly improved sales evidence as a basis for valuation when the task at hand is to determine unimproved value is not to be recommended. The reason is obvious. Should there be an error in or a miscalculation in the value of the improvements then the resultant analysed unimproved value is in error. Further, we have the added problem here that while there is agreement that the price paid by the appellants was too high, it is obvious that they were very much attracted to the style of building on the subject site and it is they, of course along with the vendor, who set the price for the property. For my part, I am not influenced in this decision about the evidence of the sale of the subject property. Where then to we go from here? It is clear that the two remaining sales relied upon by Mr Savage are not comparable but they do, at least; provide a base platform as it were, from which to express an opinion as to the value of the subject land. Now to the evidence of Mr Thomas as to the unimproved value applied to 4 Holmes Street, Toowong is not of any great weight although it convinces me that it -- 5 of 6 -- - Page 6 - is a splendid site. We have no information as to the basis for that valuation. It is far removed from the subject property. Upon my consideration of all the evidence including that of Mr Thomas about valuations not increasing pro rata with increasing areas, I find that the valuation of the subject land is somewhat excessive as a site. I find that an unimproved value of $250,000 for it is fair and reasonable as at 31st March, 1990. Accordingly, the appeal is allowed, the determination of the Valuer-General is set aside, and the unimproved value of Lot 2 on RP 82794, Parish of Yeerongpilly is determined in the sum of $250,000. (C.H. Carter) Member of the Land Court. -- 6 of 6 --