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Eco un-aware valuations

Posted: 10-10-09

Good day,

Myself and my partner have finalised plans for the construction of our new home and we are shortly to commence looking for finance. However, the off-plan valuation we've just had pays no attention whatsoever to the home's "Green" or "Eco" credentials and has come in under the cost of the build itself!

This is an email I have just rattled off to the New Zealand Green Building Council.

When institutions lend to people like us, they do so in staged payments to pay for pre-defined phases of the build: Slab down, framing up, closed-in, roof-on etc and will lend to reach this stage and not a penny more. In order to be able to do this, the bank will ask for a registered valuation, off-plan to start with and then based on site-visits thereafter.

However, valuers have a very set way, some might say neolithic, of coming up with a dollar amount in an off-plan valuation.

For our own plan, the central heating system, solar DHW (Domestic Hot Water) above spec insulation, mountain views and northerly aspect seem to count for bugger-all other than their purchase price.

Put it this way: This is like valuing a home with a knackered 70s kitchen, and then installing a spanking new $15,000 kitchen and the house being re-valued at exactly $15,000 more than the first valuation. As you know, this is not how added value in property development actually works.

There is no apparent resale value, or added-value in our having designed-in these features and thus, our build costs currently exceed the amount the project has been valued at.

We're both pretty angry right now - even more so that we now owe the company $750.00 for the privilege.