NEWSLETTER – APRIL 2024

CANNON ROCKS RATEPAYERS ASSOCIATION (CRRA)

More information is available on our website – www.cannonrocks.com

 

PROPERTY VALUATION.

  1. The Ndlambe Ratepayers Forum (NRF) had a meeting with the Municipal Chief Financial Officer (CFO), the deputy Chief Financial Officer and the valuator on Wednesday 6 March 2024. During the meeting the valuation process, enquiries forwarded by members of the NRF and valuation trends were discussed.
  2. Lists of property valuations of both the valuations in 2018 and 2023 were obtained to compare the variation of properties in the Ndlambe Municipality since 2018.
  3. Methodology. The 2023 valuations were based on market-driven values and aerial photography, which had not been previously utilised.  An independent party was employed to measure and calculate the total floor space.  Lightstone reports were also consulted.  Sales data, property photos, aerial imagery, and data collection were utilised to determine property values.  Valuations were segmented into similar areas, such as those with a sea view or close proximity to the beach.  Recent property sales in the area were documented, and the median property value was utilised to assist in evaluating properties within specific areas.
  4. Trends.
    • Since the Covid-19 pandemic the Ndlambe Municipality experienced, especially in some of the eastern villages, a sharp increase in new developments as well as an increase in the value of residential properties. The combined value of residential properties in the Ndlambe Municipal area experienced an average increase of ±6 % per annum (±30%) since 2018.
    • Huge increases/valuation differences, with no improvements nor surrounding sales, in the same street in Cannon Rocks i.e. erf 31(-1.4%), erf 30 (+31%) and erf 32 (+31.7%), also erf 306 (+139%) were noted. Stands in Melkhout Street vary from R190,000.00 to R235,000.00.  The above examples were mentioned at the meeting with the municipality and the valuator as examples of inconsequent valuation.
  • The valuation of approximately 259 (66%) developed properties in Cannon Rocks increased between 20% to 40%
  • Of the developed erven in Cannon Rocks Almost 80% of the Properties increased in valuation between 15% to 40%. Whereas vacant, undeveloped, erven in the new extension increased by approximately 15%.
  1. Discussions.
    • Due to the change of the methodology since 2018, and the actual increase in the value of properties experienced, the result of the previous (2018) valuations should not be compared to the 2024 valuations.
  • The valuation and objections process, as well as the calculation and determination of tariffs, are two distinct processes. The latter is part of the budgeting process.  With Ndlambe’s General Valuation Roll value increasing by four billion rand (from 14 billion rand to 18 billion rand), the resulting additional income could influence tax rate factors, currently set at 0.011 cents to the Rand.  This influence could vary depending on whether there is a municipal budget surplus or shortfall in the upcoming financial year.
  • The Chief Financial Officer (CFO) questioned the correctness of the Tax collection inefficiency of greater than 50% as well as the total amount of arrears, as presented. The actual shortfall of debt collection percentage is exceptionally low, closer to less than 10% in comparison to other municipalities.  The CFO believed that at least 7% of this debt was not recoverable.  However, they cannot write it off in one year and will have to spread the write-off over a number of financial years.  Also the increase in property tariffs are not used to fund unrecoverable debt collection as it follows another process.
  • The determination of a percentage threshold for referral to the evaluator is a highly disputed approach, as valuations are primarily market-driven and trends may be negative. Therefore, it is essential to also consider negative percentages.
  • Larger metro’s have a larger income base than small municipalities to cover compulsory basic/general expenses. Therefore, there are differences between municipal valuation tariffs.
  • Discussions with property owners in Cannon Rocks were held in the Community Hall on two occasions to advise them of information obtained.
  1. Objections.
    • The valuator also acknowledges the possibility of human errors, which should be pointed out by means of the objection process. Ratepayers can help to improve the accuracy of the valuation by submitting an objection where suspected errors are observed.
    • It is advised that the following be addressed in an application for objection;
      • comparison of recent surrounding sales of both vacant/undeveloped as well as developed erven,
      • suspected valuation errors,
      • the total size of the property (square meters), and
      • the total size of garages and verandas (square meters) under the roof of the property.
  1. Closing Date. Objections must reach the Municipal Valuation Clerk, Jeanette Pienaar at jpienaar@ndlambe.gov.za before 9 April 2024