Problem
It is alleged that Kainga Ora paid too much ("an artificially high price") for some land in Tauranga in 2021. MacNamara's (2022) article said that there was not sufficient allowance for wetland remediation, costed at between 10 to 24 million. Kainga Ora allegedly paid much more than 10 private developers and may have overestimated the amount of land that can be built upon.
Importantly, the article says:
A briefing to both Minister of Housing Megan Woods and Minister of Finance Grant Robertson warned that the first valuation ($68m) was based on an estimate of developable land that was more than 30 per cent greater than the area subsequently deemed usable. The second valuation ($72.2 to $74.8m) was "based on a hypothetical scenario that assumes rezoning and infrastructure upgrades, which means it has factored in the value uplift when this is not assured."
Source: MacNamara, Kate. (2022, August 1). Affordable housing agency Kainga Ora bids up Ferncliffe Farms price on inflated valuations. The New Zealand Herald.
Task
1. How can the Valuer make clear that their valuation is based upon certain assumptions?
2. List four other professionals who could help the Valuer determine the "as is" value for the vacant development land?
3. A member of the public asks your opinion about the abilities of the Valuers who acted for Kainga Ora. Based on what you have learned in 127.242, what should you do, or not do?
4. Kainga Ora paid $70.4 million for the land. If you assume that price is too high, based on what we have learned in 127.242, how much different could still be considered acceptable? Justify your answer.
5. For what reasons (legal and otherwise) should developers (and valuers) be concerned about the remediation of wetlands?
6. Assume that as a graduate valuer you had, in fact, assessed this Ferncliffe land value. If there was a complaint about this valuation to the Valuers Registration Board, would you be liable for punishment under the Valuers Act 1948?