The Zealand Valuer - Property Institute of New Zealand

Vol. 25, No. 5
The
Zealand
Valuer
Rcqisrere P !.f GU,ce ! eadquerfem 4VelIie� on, as a M�tq°�z F
MARCH, 1985

NEW ZEALAND INSITIVIE OF VALUERS
Incorporated by Act of Parliament
President: G. J. HORSLEY
Vice-Presidents: R. E. HALLINAN, R. L. JEFFERIES
MEMBERS OF COUNCIL:
Northland............................................. W. A. F. Burgess Wellington....................................... G. J. Horsley
Auckland......................................... R. L. Jefferies Nelson-Marlborough....................... I. W. Lyall
Waikato........................................... T. J. Bernau Canterbury-Westland...................... R. E. Hallinan
Rotorua-Bay of Plenty..................... W. A. Cleghorn South Canterbury ............................ E. T. Fitzgerald
Gisborne.......................................... G. T. Foster Otago .............................................. A. P. Laing
Hawke's Bay .................................... K. E. Parker Southland........................................ J. W. Briscoe
Taranaki .......................................... I. R. McKillop Valuer-General's Nominee .............. I. W. Gribble
Central Districts...............................R. V. Hargreaves Immediate Past President ................ R. M. Donaldson
Northland ........................................
Auckland .........................................
Waikato...........................................
Rotorua-Bay of Plenty .....................
Tauranga(Sub-Branch)....................
Gisborne ..........................................
BRANCH SECRETARIES:
Miss R. L. Waddell, P.O. Box 229, Whangarei.
S. Borich, P.O. Box 3650, Auckland.
R. A. Porter, Box 4348, Hamilton East.
D. J. Owen, Box 1318, Rotorua.
A. H. Pratt, Box 256, Tauranga.
G. H. Kelso, Box 2038, C/- Lewis & Wright, Gisborne.
Hawke'sBay..................................... D. R. Buchanan, Box 458, Napier.
Taranaki...........................................P. E. Thornhill, 9 La Salle Drive, New Plymouth.
Wanganui (Sub-Branch)..................C. O'Donovan, M.O.W. & D., Private Bag, Wanganui.
Central Districts ............................... P. H. Von Velthooven, Box 952, Palmerston North.
Wairarapa (Sub-Branch).................. R. K. S. Murchison, Box 586, Masterton.
Wellington ....................................... W. J. Tiller, Box 2871, Wellington.
Nelson-Marlborough ....................... B. B. Jones, Box 167, Nelson.
Canterbury-Westland....................... C. N. Stanley, Box 1397, Christchurch.
South Canterbury............................. P. J. Cuneen, P.O. Box 119, Ashburton.
Otago ...............................................A. J. Still, Box 1082, Dunedin.
Southland ........................................ A. J. Chadderton, Box 738, Invercargill.
1938 1940 N. H. Mackie, Palmerston North.
1940 1943 - G. B. Osmond, Auckland.
1943 - 1947 A. W. A. Sweetman, Auckland.
1947 1949 O. F. Baker, Christchurch
1949 1950 J. A. Wilson, Dunedin.
1950 1951 - O. Monrad, Palmerston North.
1951 - 1952 L. E. Brooker, Wellington.
1952 1953 L. A. McAlister, Wellington.
1953 1954 W. G. Lyons, Palmerston North.
1954 1955 S. E. Bennett, Auckland.
1955 1957 R. J. Maclachlan, Wellington.
1957 1958 V. W. Cox, Napier.
1958 1960 G. C. R. Green, Dunedin.
1960 1962 J. W. Gellatly, Wellington.
PAST PRESIDENTS:
1962 1964 S. Morris Jones, Wellington.
1964 1966 M. B. Cooke, Christchurch.
1966 1968 D. G. Morrison, Whangarei.
1968 1970 A. R. Wilson, Napier.
1970 1971 - J. M. Harcourt, Wellington.
1971 - 1974 R. S. Gardner, Auckland.
1974 1976 G. M. Niederer, Invercargill.
1976 1977 L. M. Sole, Rotorua.
1977 1978 E. J. Babe, Wellington.
1978 1979 P. G. Cooke, Nelson.
1979 1981 - P. E. Tierney, Tauranga.
1981 - 1983 R. M. McGough, Auckland.
1983 - 1985 R. M. Donaldson, Timaru.
LIFE MEMBERS:
S. Morris Jones (1968) J. Bruce Brown (1970) E. J. Babe (1982)
M. B. Cooke (1970) D. G. Morrison (1976) M. R. Mander (1985)
R. J. Maclachlan (1970) J. D. Mahoney (1977)
HONORARY MEMBERS:
N. H. Chapman J. P. McVeagh J. S. H. Robertson
A. D. Thompson D. W. Spring M. Aldred
Sir William Rodger J. A. B. O'Keefe R. Aldred
F. B. Hunt
JOHN M. HARCOURT MEMORIAL AWARD:
E. J. Babe (1975) R. L. Jefferies (1979) K. J. Cooper (1981)
R. S. Gardner (1977) S. W. A. Ralston (1980) S. L. Speedy (1983)
EDITORIAL BOARD NEW ZEALAND VALUER:
R. Frizzell A. P. Laing R. J. Chappell
R. L. Jefferies J. A. B. O'Keefe M. E. Gamby (Editor)
S. L. Speedy

(Incorporated by Act of Parliament)
CONTENTS:
234 Publications and Services
235
COMMENT
Editorial.
236 Letters to Editor.
237 New Zealand Property Market Report 1985.
244 Land Compensation - Comments by the
Author.
NEWS
246 Presidential Report on 13th Pan Pacific Congress.
247 Valuers Registration Board Practice Note for
Witnesses.
247 Member of the Architects Education and
Registration Board.
248 Valuation Enquiries Automated.
249 On Line Enquiry System.
250 F.I.A.B.C.I. New Zealand Chapter.
250 Publicity & Public Relations Committee -
End of Year Report.
251 Membership
ARTICLES
253 R.I.C.S. Presidential Address.
257 Social Responsibility for Housing.
264 Computerwise - Computers in a Valuation
Practice.
269 Certificate of Valuation. Insurance.
271 New Developments in Feasibility Studies.
LEGAL DECISIONS
277 Cases Received & Noted.
277 Valuers, Registration Board Decision.
279 PROFESSIONAL DIRECTORY
Editor:
M. E. Gamby, Dip. Urb. Val., ANZIV, MPMI
P.O. Box 27146, Wellington
Asst. Editor: J. Dunckley, B. Ag., Comm. V.P.U., A.N.Z.I.V.
General Secretary:
K. M. Allan, A.N.Z.I.V.
The New Zealand
VOLUME26 NUMBER5
MARCH, 1986
Valuer
This Issue
PROPERTY MARKET REPORT. 237
New Zealand coverage.
Economic factors influence values.
REGISTRATION BOARD OUTLINES
EXPECTATIONS OF EXPERT
WITNESSES EVIDENCE. 247
PUBLIC ACCESS TO VALUATION
DEPARTMENT COMPUTERISED
RECORDS 248
R.I.C.S. EXPERIENCE PARALLELS
N.Z. MOVES TOWARDS COMPETI-
TION AND ADVERTISING. 253
COMPUTERS - HOW YOU CAN
BENEFIT IN YOUR VALUATION PRAC-
TICE. 264
VALUER GUILTY OF INCOMPETENT
CONDUCT. 277
Published Quarterly as the Official journal of
THE NEW ZEALAND INSTITUTE OF VALUERS.
Council Office: Westbrook House, 181-183 Willis Street,
P.O. Box 27146, Ph. 847-094,
Wellington.
Statistical Officer:
R. P. Newton.
"The New Zealand Valuer" is published quarterly by the N.Z. Institute of Valuers. "The Valuer" is issued to all members and institute
students, and is available otherwise by subscription.
Articles, Research Papers and letters are welcomed. They should be typewritten and addressed to the Editor. Biographical notes of the author(s) should be sent with the
manuscript. Opinions expressed by the Editor and contributors are not necessarily endorsed by the New Zealand Institute of Valuers. The Editor reserves the right to
accept, reject or abbreviate material at his discretion.
Copies of manuscripts should be retained by the author as they cannot be returned.
Business letters, subscription and advice of changed address should be sent to the General Secretary. Deadline 2 months prior. Copyright.
Registered in New Zealand at P.O. H.Q. as a magazine.
233

Publications and Services
available from the
New Zealand Institute of Valuers
(ADDRESS ALL ENQUIRIES TO THE GENERAL SECRETARY, P.O. BOX 27-146, WELLINGTON)
PUBLICATIONS
URBAN LAND ECONOMICS Q. D. Mahoney 1974)
LAND ECONOMICS REPRINT OF ARTICLES FROM N.Z. VALUER.
(For students of Economics)
URBAN VALUATION IN N.Z. VOL.1. (R. L. Jefferies 1978) (Bulk orders
of 10 copies of more $25.00 per copy)
FINANCIAL APPRAISAL (Squire L. Speedy) 1982
LAND COMPENSATION (Squire L. Speedy) 1985
VALUATION OF UNIT TITLES (M. A. Norton) 1975
LAND TITLE LAW (J. B. O'Keefe)
THE PRINCIPLES AND PRACTICE OF RATING VALUATIONS IN
NEW ZEALAND (J. B. O'Keefe) 1982
METRIC CONVERSION TABLES
N.Z. VALUER (To non-members)
N.Z. VALUER (Back copies where available)
N.Z. VALUER (Index Vols. 20-24)
GUIDANCE NOTES ON VALUATION OF COMPANY PROPERTY
ASSETS FOR CURRENT COST ACCOUNTING (C.C.A.)
A CRITICAL ANALYSIS OF THE INCOME APPROACH TO VALUING
REVENUE PRODUCING REAL ESTATE (Lincoln W. North) 1985
VALUER'S HANDBOOK (Revised 1984)
MODAL HOUSE SPECIFICATIONS/QUANTITIES 1983
SERVICES TO STATISTICAL BUREAU MEMBERS
MEMBERSHIP SUBSCRIPTION
STATISTICAL BULLETINS
SALES INFORMATION (Microfiche Lists)
SALES INFORMATION (Electronic form)
MISCELLANEOUS
CERTIFICATE OF VALUATION FOR INSURANCE PURPOSES (Pads
100 forms)
VALUATION CERTIFICATE PROPERTY ASSETS (Pads 100 forms)
234
$4.00
$5.00
$28.00
$35.00
$50.00
$2.50
$3.00
$23.00
$3.00
$15.00 p.a.
$1.00 per copy pre-1980
$3.00 per copy 1980
$1.00
$5.00
$15.00
$20.00 members
$16.00 students
$10.00
$25.00 p.a.
$25.00 p.a.
$250.00 per calendar year.
Additional sets at reduced
rates.
From $500.00 per year,
P.O.A.
$8.00
$10.00

Pan Pacific Congress
Editorial Comment
A small group of 24 New Zealanders formed our delegation to the 13th Pan Pacific Congress in Honolulu,
Hawaii in February this year. A presidential report is contained in this issue.
New Zealanders have the ability to enjoy themselves wherever they may be. However it would be recognised that
this was not the most successful Pan Pacific Congress in recent times despite the concerted efforts of our
American hosting organisers The American Institute of Real Estate Appraisers, and The American Society of Real
Estate Counselors.
New Zealand faces the difficult task of rejuvenating a biennial conference which has been steadily losing appeal.
As hosts of the 14th Pan Pacific Congress at Christchurch in 1988 our Institute must come up with a programme
of sufficient stature to attract the members of our allied organisations for other than purely holiday
reasons.
The best attended conferences and seminars in recentyears have involved speakers of international renown.
They need not be directly involved in valuing or appraising. It could be that an outsider would provide the
stimulus that a member of the profession lacks. Workshops, too, need to have direct participation by registrants
rather than the lecture style adopted in recent years. Field trips in conjunction with a workshop could prove
popular, particularly having regard to our strong rural background.
New Zealand has the opportunity to capitalize on our combination of valuing expertise, reputation, recognised
hospitality and an outstanding natural environment, to make the 14th Pan Pacific Congress in
Christchurch the occasion to which all future congresses will be compared.
Let it be a challenge!
Valuers' Registration Board
The Board has issued a practice note for witnesses, printed in this issue. The statement may cause some concern
among Registered Valuers, as the Board is hopeful of obtaining a degree of sales investigation not normally
performed by Registered Valuers even for Court Appearances.
There is little doubt that the ability of a registered valuer to adequately research sales evidence is constrained
quite simply by his fee. One might well argue that one of the prime requirements of a valuer of residential property is
to assess the market value within an acceptable market range. This is particularly so in a very imperfect market
where fluctuating economic conditions can be of greatersignificance at any given time than whether the house has
been repiled or the bathroom upgraded.
However the intentions of the Board in this regard must be noted. Registered Valuers are now clearly advised that
less weight will be placed on their testimony where full and detailed investigations have not been undertaken.
Sales verified only from micro fiche data should not be acceptable to the Board as they may contain significant
human error in recording information including, at times, the sale price and sale date. An on-site inspection of all
comparables should be undertaken where possible.
The question must remain. How does the Registered Valuer recover the full cost of his investigations?
EDITOR'S NOTE
The March 1986 issue has been severely delayed by matters outside the Institute's control.
The Daily Telegraph Co. Ltd which has printed our Journal over many years advised us in early March that the Company is ceasing its
commercial printing operations. This has necessitated urgent rearrangements and the consequent delay.
The Editorial Board had planned a reformatting of the Journal at an early date and this is the opportune time. Volume 26 will be closed off at
the March 1986 issue and Volume 27 will be produced in an updated format utilising more modern printing techniques some of which have been
incorporated in this issue.
235

Sir,
I refer to an article in the December issue of The
New Zealand Valuer entitled "Athletic Park Case". I
am amazed and disappointed that the Editor of a
professional magazine such as yours would agree to
publish such an article.
Not only does it reveal the personal philosophies
and/or politics of the author but it shows a distinct
lack of understanding of the principles in question.
Such statements as "having to subsidise the Wellington
Rugby Union's rental", "the Maori owners
will suffer a total loss of rental" can only be described
as emotional.
When a professional closes one eye to examine an
issue as complex as the one referred to in this case
without having been a party to it, then his findings
will inevitably be as astray as those contained in the
article published. His comments under the heading
"Selling Designated Land" indicate to me what little
grasp the author has of his subject.
Sir,
Letters to the Editor
Yours faithfully,
ARTHUR STEWART
Managing Partner, Darroch Simpson & Co.
I refer to Assistant Editor Dunckley's report, on
the Committee to investigate matters relating to
Crown leasehold land, on which he invites comment.
Comment is warranted as important principles are
involved.
It appears from Mr Dunckley's summation that
valuation techniques should be modified to suit an
apparent inequitable leasehold situation. As a matter
of objectivity I think the following points should be
put in perspective:
1. The Committee was appointed by the Minister of
Lands as a result of pressure from Lessees.
2. It comprised 15 members of whom 3 were
Registered Valuers.
3. The major concern obviously is the level of rentals
payable for Crown land. The matter of valuation
arose only as part of that concern - a specific
topic in 3 of 12 of the terms of reference.
4. The Committee did not suggest that L.E.I. is the
residual of Capital Value less Improvements (as
Mr Dunckley states). Its criticism was directed at
the "residual method of sales analysis" - a
method used universally by Valuers to arrive at
the price paid for land in an improved property
sale. It did not offer a better alternative method.
5. The method of L.E.I. assessment. Criticisms
made by the Committee in reference to difficulties
involved are accepted. There has however, been
little argument in the past where Valuers, fully
conversant with valuation principles and with the
236
nature of a property, have reached an objective
"best" assessment. Renewals and freeholdings
have been carried out on the present basis for
many years with generally little adverse reaction
from Lessees or their advisers to the assessed
values. It is incongruous therefore that values are
now called into question (by some Valuers among
others) in order to remedy a rental situation.
The suggested alternative rental base relating
original carrying capacity to present stocking is as
unlikely as it is nebulous. The resulting rental
basis (which Mr Dunckley has labelled L.E.I.)
cannot be said to represent value by any definition.
What, for example, is the case with heavy
bush land or swamp - nil original carrying
capacity hence nil rental value and nil rent payable
- a ridiculous situation.
6. As Mr Dunckley points out the Land Act provides
in Section 131 for "equal emphasis" to be placed
on the value of improvements and the value of
L.E.I. Also that values shall be on an "equitable
basis" having regard to the relationship between
Lessee and Lessor. The report acknowledges that
there is no clear definition of this relationship.
It is suggested by the Committee that more flexibility
be adopted in negotiations presumably over
the quantum of L.E.I. The inherent pitfall here is obviously
that less than objective interpretations will
result in widely differing values. Could this mean an
advocate approach and compromise values?
All that any Valuer can do in compliance with
those clauses is to be aware to the greatest degree
possible of all that has gone into transforming the
unimproved land to its present state in order to arrive
at its unimproved nature and value. Opportunities
for Valuer's meetings in cases of dissatisfication have
been available prior to Tribunal hearings and, albeit
expensive, the Court remedy remains.
My concern is that some may be prepared to forgo
well established principles to meet a temporary "inequitable"
rental situation. The matter is between
Landlord and Lessee and other avenues can be pursued,
albeit politically, to amend the state of affairs.
It is fitting that Valuers contribute to that process but
is it necessary to publicly question their own techniques
and incur an effect beyond the immediate
issue? The Committee did after all conclude that
valuation should continue to be the basis for
establishing rental and freeholding values.
Yours faithfully,
A. B. PASSMORE, A.N.Z.I.V.
I refer Mr Passmore to pages 13, 14 and 15 of the
committee's report which contains the full statement
of my summary regarding the L.E.I. assessment.
Assistant Editor
J. DUNCKLEY

PREAMBLE
New Zealand
Property Market Report 1985
Released under the hand of the President of the New Zealand Institute of Valuers Mr G. J. Horsley
Certain sectors of the Urban Property Market in
New Zealand continued to trade on a normal basis
during 1985, through to the mid point of the year,
with in particular, lower cost housing sales and
values buoyed by the availability of Post Office mortgage
finance at somewhat concessionary interest
rates. Commercial property redevelopment activity
was relatively high in the central business districts of
Auckland, Hamilton, Tauranga, Rotorua, Wellington,
Christchurch and to a lesser extent in Dunedin
reflecting amongst several influences expansion of
financial and professional services, and growth in
Government departmental accommodation requirements.
While some specialty rural property types such as
merino wool units, land with potential for deer and
goat farming, as well as close city small holdings and
some dairy farms maintained historical value structures,
farm sale volumes were generally well down on
previous years, and less viable marginally economic
properties of various classes appear to have lost value
significantly by comparison with the market peaks of
1981-1982.
It is felt certain by the Institute that farm values
will continue to move closer to productive worth during
1986 and while on farm costs and interest rates
increase a continuation of the downward trend in
farmland values is likely, especially in the meat and
wool sectors. However recent Government changes
reviewing standard values, the claw-back tax provision
and specific income limits should help to steady
the rural market, and most of The Institutes regional
commentaries predict a bottoming out by mid to late
1986.
RESIDENTIAL HOUSE & SECTION MARKET
The housing market was noted to be particularly
competitive in Northland during 1985, with the
volume of sales having declined over the period. Sections
in top locations have achieved prices of up to
$40,000, however there has been a generally firmer
market in the less favoured positions, with prices
ranging $25,000 to $30,000. Towards the end of the
year there was a fairly discernible decline in new
house construction.
In Auckland during the first nine months of 1985
the residential market is reported to have been moved
up a gear after an increase in activity and values in
late 1984. Lower cost group housing including the
site is now costing about $70,000 in outer areas,
although similar houses on the North Shore with a
higher land value content realise approximately
$85,000. The medium value range ($100,000 to
$200,000) has tightened as a reflection of the higher
cost of mortgage finance and the Auckland Branch
of the Institute observed that by the year's end it was
a buyer's market with some vendors leaving in second
mortgage finance in order to conclude sales.
Other trends have included "trading down" to lesser
valued properties when owners have found difficulty
237
in paying increased mortgage costs, although such
trends were relatively rare. 1985 saw an increase in
the demand and supply of higher priced dwellings,
townhouses and apartments, particularly with
waterfront views or access. Prices over $250,000 are
reported as being common in Auckland's eastern
suburbs and some North Shore localities, notably
Milford and the Takapuna "Golden Mile". Retirement
villages are a developing trend in a number of
cental and outer Auckland locations and provide a
life interest, with a variety of on-site amenities including
hospitals, halls and recreational facilities.
House sites for townhouse development can range in
favoured areas to $100,000 in Auckland, although in
outlying areas as little as $15,000 secures a similar
land interest.
In Hamilton the first three quarters of the year
was particularly buoyant with sales averaging in the
vicinity of 60 per week. Prices "during that time
climbed steadily and achieved an across the board"
increase of 1 % per month. However, the final
quarter of 1985 showed a distinct fall off in demand
with prices static. The section market slowed
towards the year's end, although in the earlier
months it had been particularly bouyant in the
$40,000 plus price range.
The Bay of Plenty Branch of the Institute of
Valuers reports an increase in the total urban sales
over the previous year, although there was little
movement in Tauranga house prices where a wide
range of property was available in the $60,000 to
$240,000 range.
The Rotorua area recorded most activity and rising
prices during the early part of 1985. The value for
average quality residences rose sharply during the second
quarter of the year due largely to a relaxation of
the Post Office lending criteria. However this movement
did not include better quality homes. In the
urban sectors of the Taupo Basin the property
market was quite buoyant for vacant land and
superior residential properties, whereas in
Whakatane the volume of sales was low and price
levels remained constant for medium quality
residences, although a slight upward movement was
noted for better quality homes. Ohope has recorded
a continually rising market for vacant sections, while
in Kawerau all classes of residential properties were
hard to sell during 1985.
Coming across the island to Gisborne, a sector
that traditionally suffers from high building costs
spec builders were quite active in the own-your-own
lfat area in 1985, although by December the market
was apparently saturated with some 10 to 12 flats on
the market at around $80,000 to $85,000. 1985 saw
an increase in the take-up rate of building sections
with prices up almost 33% over 1983 levels. Only
very modest increases were evident in section and
house prices in Wairoa while residential properties in
Opotiki were showing increases of up to 50% above
1981 levels, and sections ranging from $10,000 to
$25,000.

The estimated number of house and section sales
in Hawke's Bay appears to have declined slightly on
1984, however house property prices showed modest
increases apart from top end houses (in excess of
$120,000) which have been slow to move. The
highest price for a residential property in Napier was
recorded during the year when a modern two storey
Tudor style home sold in July for $256,000, occupying
an elevated site with good views. The highest
recorded (minimum sized) ownership flat development
site of 300 metres was also achieved during the
year in McKenzie Avenue, Marewa, at $22,000,
some 70% above the 1984 levels.
Price levels for residential sections continued to
increase during 1985 in New Plymouth with lower
end sites ranging $12,000 to $18,000 and the better
located sites at up to $40,000. As the year progressed
selling periods for improved residential properties
tended to lengthen, and some sales showed a drop of
15% on the original asking price. Few sales exceeded
$150,000 and during 1985 there was very little movement
in the overall price levels of all classes of dwelling,
compared to the ranges established at the end of
1984.
In Palmerston North the house market for properties
in the $60,000 to $90,000 bracket slowed
notably during the year. Properties in excess of
$100,000 were selling readily at times, but proved difficult
towards the end of the year. The section market
also suffered a downturn in the latter part of 1985,
thought to be a consequence of tightening Housing
Corporation lending criteria and restraints for Post
Office loans.
The Wellington Branch of the New Zealand
Institute of Valuers reports that the residential property
market stuttered along at moderate levels for
most of the year with the exception of a short period
when the Post Office came on the lending market.
This had the effect of substantially increasing demand
for property in the range $80,000 to $90,000.
While a number of residential subdivisions are in the
process of construction in the region, price levels are
reflecting substantially increased development costs
with average quality sections at Whitby approaching
$30,000, and better allotments with wider views etc.
ranging up to $55,000.
In the Marlborough region there was an ample
supply of sections in the $25,000 to $35,000 range (at
the upper end of the market during 1985) and similarly
at the lower end ($14,000 to $15,000). The
developed residential property market hardened
with the general trend of the country's economy and
the top of the market for developed residential property
remains at $150,000. In Nelson City two significant
auctions in the inner city area reflected a
keen demand for residential land, the first a 581
square metre corner site sold for $72,000 and the
second a 603 square metre narrow site sold for
$55,000. On the exclusive "Cliffs" area recent section
sales have been recorded between $85,000 and
$120,000, whereas sections in the early part of the
same subdivision sold in 1981 for about $42,000.
There are few old homes available in Nelson City at
less than $50,000 and cross lease flat developments
have continued to be produced with the majority
priced around $60,000. Steady building activity has
continued in Atawhai, where the average improved
property sale price lies between $120,000 and
$150,000.
238
During the first six months of 1985 a buoyant
market existed for low to medium priced houses in
Christchurch, with lower cost properties selling in
the vicinity $45,000 to $50,000, an increase of around
25% on 1984 prices. However, superior priced
homes were relatively slow to move with less market
activity and around July/August the overall market
apparently plateaued. During the second half of the
year the number of recorded sales fell away. The
house building boom early in the year was evidently
slowing. However the Canterbury Branch of the Institute
believes that rising incomes following on from
wage rounds should reinstate market confidence.
This may lead to an increase in market activity, but
not necessarily increases in property values.
Across the island on the West Coast there was a
significant increase in house sales during 1985 and of
significance were three residential sales in central
Greymouth at figures in excess of $150,000. Concurrently
there was strong activity for older homes at the
lower end of the market, i.e. under $30,000. Vacant
section sales were consistent at $12,000 to $14,000 in
the Borough of Greymouth, between $10,000 and
$12,000 in Westport and $9,000 and $11,000 in
Hokitika.
In South Canterbury all residential sectors remained
firm with steady demand up until the last
quarter of 1985 when new trends became evident in
Timaru City and the smaller Boroughs. High priced
housing (over $100,000) met lower levels of demand
and the sale rates slowed, turnover slowed for middle
priced housing, however lower priced housing (up to
$50,000) continued to sell with increasing values. The
Ashburton residential market was reported to be
firm at all levels.
In Dunedin the bulk of family homes now range
from $50,000 to $85,000, and amongst the higher
priced homes fewer sales were recorded, and in
general prices were harder unless the properties had
some individual appeal. Overall, there was thought
to be a cautious residential market and a large
number of new ownership flats available, mainly
constructed on a speculative basis by builders. No
new subdivisions have been commenced in either
Dunedin City or Mosgiel Borough although
available section prices have continued to creep upwards.
In Southland first home buyers in the $35,000-
$50,000 bracket were predominant early in the year.
High interest rates for mortgages later caused a slow
down in the market and discounts of about 10% at
the top end of the housing market - $120,000 or
more.
RESIDENTIAL RENTAL MARKET
The Institute's Northland Branch predicts some
decline in rentals, particularly for older run down
properties during 1986 as a consequence of the
gradual Marsden Point Refinery Extension winddown,
although there was no evidence of declining
rental values during 1985.
Following the removal of the Rent Regulations in
February 1985 there was a short period of some high
rent increases from landlords in Auckland, however
the situation had stabilised by the year's end. Demand
is still strong with current rents for standard
accommodation throughout central Auckland ranging
for one bedroom units $70 to $90 per week, two
bedroom units $110 to $130 per week and three
bedroom units $130 to $170 per week.

Slightly lower rental structures were reported in
Hamilton by the year's end, with the demand and
supply of house and flat rentals noted to be in
balance, after a distinct under supply during the Rent
Freezes. Rentals for average housing at Taranaki are
now in the vicinity of $120 to $140 per week, at least
$20.00 below 1982/83 levels.
In the Marlborough region residential rental accommodation
appears to have also achieved a
balance during 1985 with rentals virtually consistent
on 1984 levels. Rentals for residential accommodation
in Nelson generally ranged $70 to $90 per week
for one bedroom flats, $80 to $110 per week for two
bedroom flats, and up to $150 per week for a house.
In Canterbury the rental market did not increase
as anticipated after the removal of rental controls,
although early in 1985 there was a shortage of rental
accommodation and a high demand. During the latter
half of the year this tapered off, stalling anticipated
rental increases to levels comparable with
1984, and slightly up on 1983.
THE COMMERCIAL PROPERTY MARKET
In Whangarei the commercial/industrial sector
was fairly bouyant during 1985 with considerable
development and redevelopment carried out. Many
of the projects were either pre-sold or pre-leased
before construction. However, when that did not occur,
some difficulty was experienced in finding either
purchasers or tenants. Towards the end of 1985 there
was some evidence of investors seeking higher yields
and signs that owners were experiencing difficulty in
re-letting older office suites. Prime properties within
the Whangarei commercial core were highly sought
after and ownership tightly held.
Auckland's Central Business District continues to
develop with both new office and retail space, while
of particular note is the high rise office development
in fringe areas such as Symonds Street, Hobson
Street and Upper Queen Street. In spite of predictions
that there could be an over-supply of office accommodation
by up to 20076 by 1988, particularly for
the older buildings (circa 1960/70) the market remained
optimistic. There was little problem in letting
good quality office space with a shortage in some
areas of bulk space (10,000 square feet plus) resulting
from a demand in the growth of businesses and
amalgamation of professional firms. Suburban
commercial premises continued to be developed in
both central and outer areas of Auckland bringing
about increases in rentals as well as renovation of
existing and older shops. The number of shops appears
to have increased with still more planned, one
development in Newmarket planned to provide in excess
of 35,000 square feet of retail space in the form
of a restaurant and supermarket, as well as 25,000
square feet of office space and approximately 600
carparks. A new development trend is in the form of
"maxi marts" to provide "one stop" department
store type shopping. Industrial property market activity
continued over most of Auckland, however the
demand for smaller investment properties (up to
$750,000) slowed during 1985. Above this level
(more the domain of Pension Funds, institutions and
large developers) the market remained buoyant.
Yields for smaller industrial properties ranged 8.5%
to 9.5% while rentals for small industrial units
(under 5,000 square feet) on Auckland's North
Shore are now approaching $7.00 per square foot per
annum. A feature of the market is the demand for in-
239
dustrial land, particularly in central areas and in
West Auckland, Mt Wellington and Wiri.
The demand for commercial real estate appeared
to ease during the last quarter of 1985 in Hamilton,
however the central city area redevelopment continued,
including the Centreplace Complex. Retail
space in the southern sector of this city is likely to
diminish in demand as a consequence. Large upward
price movements have been evident for development
sites in the central area and while a number of new
motels have been developed, Hamilton still lacks a
high quality tourist standard hotel. The industrial
property market was generally steady throughout the
year.
A building boom has been recorded in Tauranga
with some 16 commercial buildings either under construction
or completed during 1985, as well as major
developments in Mt Maunganui, Katikati and Te
Puke. These projects have lifted rental levels to new
heights, with a consequential flow-on effect
throughout the commercial and industrial rental
market. Likewise Rotorua's commercial central district
was bouyant during 1985 and there was a
dramatic increase in new commercial building and
redevelopment of existing properties. Both property
values and rental rates appreciated sharply, although
a downturn in demand for space was evident during
the final two months. Key money or goodwill payments,
always evident in the central commercial area
of Rotorua increased in frequency during 1985. The
commercial centre of Taupo Borough is developing
rapidly and rentals have increased substantially,
however in Whakatane price levels were showing
only a slight upward movement during 1985.
In Gisborne there is some minor redevelopment in
the central business district with retail rentals ranging
from $108 to $155 per metre of frontage per month.
Government Departments continue to be the prime
lessees for office accommodation. In Gisborne
prime accommodation is scarce at $55 to $60 per
square metre per annum. Commercial and industrial
sales are reported as being rare in the County towns
while there has been little movement in 1985 in industrial
land prices.
In Hawke's Bay commercial sales for the main
centres, Napier and Hastings showed some decline in
volume during 1985, although the pattern for industrial
sales was similar to 1984. Vacant commercial
site values close to the central business district in
both cities continue to show substantial increases,
while industrial land values are appreciating as
evidenced by a sale for a 9167 square metre site in
Omahu Road, Hastings during the year at $240,000,
while a smaller site in Kelfield Place increased from
$25,000 to $40,000 in resale, over a 14 month period.
Office and retail rents in both cities are increasing on
average at between 10% to 15% per annum, but with
slower growth rates being recorded for older fringe
area space. New office space is now letting between
$90 and $100 per square metre per annum with top
retail location rents having risen to $160 per square
metre in Napier and $200 per square metre in
Hastings.
Substantial price increases are reported for both
improved properties and vacant sites in New
Plymouth with the Taranaki Branch of the Institute
reporting that small central city industrial sites are
now selling at in a range $130 to $300 per square
metre, depending upon location. Some central retail
shop rentals range up to $300 per square metre, but

most lie in the range to $200 per square metre, while
office rentals lie between $75 and $120 per square
metre per annum. Activity in South Taranaki including
Hawera has remained steady with top quality
retail space fetching in excess of $100 per square
metre per annum and office rentals lying between
$45 and $80 on standard three year terms with the
lessees paying rates and building insurance.
The development which is expected to have the
biggest impact on Palmerston North is the proposed
construction of the Foodtown Supermarket and
restructuring of the adjoining PDC Building in
which 60 separate shops have been created. This inlfuence
has brought about the demise of key money
in The Square for shop leases and realistic asking rentals
are required in order to secure tenants. As with
the retail supply situation a number of new office
developments have been balanced by demand, and
rentals have accordingly maintained a consistent
level. Rentals for industrial space and particularly
warehousing occupations have shown only modest
increases during 1985.
In Wellington City the effect of the rapid rate of
commercial development since the beginning of the
decade and short supply of suitable commercial land
has seen increases equivalent to 50% per annum in
land value to levels of approximately $7,000 per
square metre, over the past two years. Office rents
have followed a similar trend with one example compounding
at almost 15% over five years. There is
now a substantial spill-over of office development
into the secondary areas such as Boulcott Street and
Willis Street, however after a period of rapid increase
Lambton Quay retail rents stabilised at around $70
to $80 per square foot with less favoured positions
ranging down to $40 to $50 per square foot per
annum, with strong resistance from retailers in the
less favoured arcades, and a higher rate of tenant
turnover becoming evident. Porirua Town Centre is
reported as having the most significant commercial
rental increases while conversely Lower Hutt is in a
state of flux over the effect of proposed shopping
malls. The demand for small industrial investment
property is at high levels with one well located
Porirua building noted to have been sold late in 1985
at a pre-tax, pre-depreciation net return of 8.0%.
This is an example of investors' willingness to place
capital gain ahead of immediate earning capacity.
While there have been no significant sales of office
developments in Blenheim, the first privately owned
office building in ten years has been completed and a
new block of Government offices planned to start.
Ground floor rentals range from $110 to $215 per
square metre per annum, while second floor space lies
in the range up to $55 per square metre. Retail investments
were in strong demand during the first nine
months of 1985 with realisation prices yielding 10%
to 10.5% for modern well located properties and
keen interest evident in a price range to $200,000 and
beyond. By the year's end tenants were however expressing
anxiety as to trading prospects during the
autumn and winter period of 1986. Small space retail
rentals now range up to $215 per square metre while
light industrial rentals have also increased significantly
ranging $55 to $70 per square metre per annum
for main street locations, down to $35 for side
street workshops.
In Nelson City the affordable level of commercial
property now lies in the $400,000 to $500,000 range
evidenced by four recent transactions. There is con-
240
tinued redevelopment of older earthquake risk
buildings with other significant activity including
completion of major banking premises in Trafalgar
Street, and demolition of the Hotel Nelson for
rebuilding. This will involve a two storeyed construction
with ground floor retail and first floor tavern accommodation
designed by a well known Wellington
architectural practice and sold on to the United
Building Society. Trafalgar Street retail rentals have
reached $300 per square metre, but the rental rate
falls away in peripheral locations to approximately
one third of that rate per square metre per annum.
Good quality office space remains in short supply,
while industrial rentals for new space in the city are
reported as being in the order of $55 to $60 per square
metre. Storage space is currently being leased in the
$35 to $45 per square metre per annum range, in
Nelson.
The commercial property market is reported as
having been quite buoyant during 1985 on the West
Coast, in all three main centres. Office accommodation
is at a premium in Greymouth with several
major developments planned or proposals underway
to meet an increasing demand. Hokitika and Westport
have been generally slower to develop but there
has been a consolidation of the business areas during
the past 12 months. Rental values in excess of $100
per square metre are now being achieved for central
retail space in Greymouth, and up to $70 per square
metre for top quality office accommodation. Rates
for similar space in smaller centres are around 25%
below these figures.
In Christchurch demand for central city commercial
property continued unabated throughout 1985
with buoyant trends probably greater than experienced
during the preceding two years. Higher
mortgage interest rates however meant that an increased
cash equity (about 60%) was required for
most income earning investment propositions,
whereas earlier lower servicing costs meant that a
45% cash equity was possible. Growth in retail shop
rentals slowed during the year, however an increase
of around 10% to 12% generally occurred. Office
rentals increased significantly reflecting good demand
and returns more in keeping with cost.
Redevelopment land prices rose sharply, particularly
for land adjacent to the River Avon and the north
side of the city. A site of 1613 square metres opposite
the Town Hall sold late in the year for $1,000,000 at
least 60% higher than would have been achieved late
in 1984. Concurrently city industrial land values
within the four city belts of Christchurch recorded
large value increases from companies seeking
marketing prominence and ease of distribution. Industrial
building activity grew steadily during 1985
and in the early part of the year up to about August it
appeared that demand for industrial investment property
had increased, while buyers from rural areas
were less evident, other purchasers utilising overseas
loan funding became apparent.
In Timaru during 1985 new office rental rates
were recorded in the range of $70 to $80 per square
metre per annum for a bare shell with good refurbished
space at $40 to $60 per square metre. Retail
rentals increased dramatically at up to $170 per
square metre for prime locations and in general office
and prime retail properties increased considerably
in value following the strong rental growth.
Lease-back investors of industrial properties sought
yields of 10% to 12%, however the market for outer

city industrial properties remained comparatively
quiet.
The Otago Branch of the Institute reports that the
demand for both owner occupier and leased retail accommodation
in George Street, Dunedin continued
at a strong level with rents having more than doubled
in the past four years, now achieving $400 per square
metre. However, there are signs of a swing back to
Princes Street (the main street south of the Octagon)
because of more attractive rental structures. It is
thought that there is a current demand for approximately
12,000 square metres of office accommodation
in Dunedin with rentals for new buildings now
over $120 per square metre per annum plus outgoings.
In Queenstown commercial rentals for new ground
lfoor space are being set at $200 per square metre with
first floor lettings at $100 per square metre per annum.
The Otago industrial property market appeared to
ease in mid year, but strengthened with increasing
property and rental values in the third quarter of
1985. Of particular note are increases in land values
on the Southern Endowment and a steady improvement
in the market for industrial property in the
Kaikorai Valley. In general terms land values on the
Endowment have risen 10% to 15% with premiums
being paid for small parcels. Warehouse rentals appear
to range from $35 to $45 per square metre per
annum, depending upon scale and location.
The highest land sale ever recorded for the Invercargill
central commercial area at $1,005,000 for a
site of 7122 square metres was recorded during 1985.
Other proposals include the redevelopment of the
Majestic Theatre site to incorporate a shopping mall,
however a ratepayers' poll opposing the raising of
loan money for commercial development by the local
authority stopped the Invercargill City Council's
proposed two storey library/retail shopping arcade.
Prime ground floor retail space rentals now range up
to $180 per square metre and commercial property
yields lie between 9.5 % and 10.5 %. There is however
a surplus of first floor space due to a lack of off-street
parking. Service commercial properties in Invercargill
have shown good increases in both values and
rents with yields now ranging 11 % to 11.5 %. There
continues to be a reasonable demand for industrial
buildings up to 300 square metres with rentals similar
to those obtained in 1984, however many of the
larger industrial buildings which cater for farm
orientated or smelter related activities are vacant as a
result of the general downturn. A recent rent review
of a large storage/woolstore of over 4,000 square
metres showed an increase of only 18 % to 21 To over
three years.
RURAL PROPERTY MARKET
In Northland there was little evidence of a drop in
the rural land market during 1985, however the
volume of economic farm sales was low and the
number of "new farmers" well down on previous
years. It was however expected that a drop in values
would be seen in 1986 as interest rates, higher costs
and lower returns take their toll. Small holdings
especially close to Whangarei and coastal properties
which have increased in demand over the past two to
three years continue to sell fairly well.
In the Auckland province the volume of rural
transactions fell during 1985 and as well there was an
apparent change in demand characteristics. While
there was a continuing demand for small holdings of
1 to 10 hectares, the high cost of mortgage finance
241
had a major effect on sales of properties exceeding 40
hectares. Close to Auckland City there was an apparent
interest in lots of up to 40 hectares for deer
and goat farming with land value levels increasing
quite dramatically (by up to 75% over 1984 levels in
some cases). Sales of horticultural quality land were
slow during 1985 and there appeared to be a slowing
in the development of such activities as kiwifruit,
although summer crops were on the increase. In the
traditional farming sector of the province few sales
were recorded, although dairy farm sales appeared
to fluctuate in value by minus 15% to plus 10% on
1984 prices. There remains a strong demand for
larger properties in some parts of the northern area
of Auckland, notably the South Kaipara Heads,
reflecting a demand for deer farming. Closer to the
city some properties have sold at up to $750,000, apparently
to business investors taking advantage of
economic circumstances. When available, coastal
properties sold quite readily at increasing levels of
value. The Auckland Branch summarised 1985 by
saying that for the most part rural property within 50
kilometres of Auckland sold at values quite unrelated
to productivity and that in the short term
there is likely to be an increasing demand for small
holdings, but the prospects for dairy, fattening and
grazing economic units is not as good and a continuing
reduction in values anticipated.
In the Waikato during 1985 a general downturn in
volume of economic farm sales was attributed mainly
to high interest rates, lower returns, uncertain short
term prospects and high yielding alternative investments.
For dairy farms the sale volume for the year ending
June 1985 was down by some 30% to 35%,
however the value for well located dairy units remained
reasonably stable. While the sales volume for
fattening farms was down by a similar margin, the 12
month period ending June 1985 showed 80% less
grazing farm sales, a trend which continued for the
final six months of the year. Specialised livestock and
horticultural farm sales maintained turnover volume
and values and some well established horse and well
located dairy farms with potential to convert to horse
studs sold at premium.
The Institute's Bay of Plenty Branch reports that
the rural market in Rotorua was quiet during 1985
with small holdings and rural/residential properties
providing most of the activity. The value of fattening
units was thought to have diminished for all classes
of land by approximately 20% during 1985 but there
was a reasonable volume of dairy farms sales at
previous levels. In nearby Whakatane the rural land
market was very dormant, however the limited
number of sales of dairy farms generally confirmed
1984 levels. There was no activity in the sheep farming
sector and small holdings and horticultural
blocks revealed a very uncertain market. The rural
market in Taupo was quiet during the year but small
holdings kept to 1984 values.
On the East Cape Peninsula between Opotiki and
Gisborne there was an unprecedented number of
properties on the market during 1985, but few sales
recorded for economically sized units. Established
kiwifruit properties with immediate income prospects
continued to sell well, however with little value
increase. Bare land sales in prime areas held up at
$22,000 to $25,000 per hectare, but poorer located
wetter or less desirable areas failed to attract interest.
All prices for grazing land were negotiable, however

northern region vendors maintained higher price expectations
than those in the southern areas of the
district. The Branch Report believed that in the
absence of sales, market levels appeared to equate
1979 prices at around $70 to $80 per stock unit. It also
suggested that there could be a profit for anyone
purchasing a vineyard at a basic bare land price and
accepting the Government incentive of $6,000 per
hectare to remove the grapes. No forestry sales occurred
and prices were expected to bottom out during
mid 1986.
In Hawke's Bay during 1985 a flutter of renewed
confidence in the pastoral farming sector early in the
year (following improved prices for sheep and beef
products after devaluation of the New Zealand
dollar) changed significantly as the year progressed.
A drop in rural sale prices escalated during the year as
the impact of the strong New Zealand dollar, and
very high interest rates continued to erode the
economic viability of sheep and beef farms. However,
in complete contrast to the pastoral land
market confidence in horticultural land continued in
The Bay at a high level during 1985 with sales of
undeveloped horticultural land reaching $30,000 per
hectare for several 4 and 10 acre lots. A trend identified
during the year was the increasing interest
amongst orchard developers in free-draining light
land which can be utilised for horticultural production
with appropriate management techniques.
As in other North Island regions during 1985,
small holdings and uneconomic blocks with amalgamation
potential continued to sell fairly readily in
Taranaki, however the market for economic farming
units was very depressed. Sales for grazing and fattening
units were almost non-existent and the limited
number of sales recorded suggested a 30% reduction
on 1982 values in Stratford, while a sale at Hawera of
a going concern for $315,000 in September 1985 indicated
realisation at 43% below it's level two to
three years previously. In the dairy market, uncertainty
over future milk fat prices was causing purchasers
to hold back until later in the year, although
dairy land values remained steady, albeit on a declining
sale volume.
In the Marlborough Region the volume of rural
sales dropped by 20% to 25% against 1984 levels,
with few economic pastoral properties changing
hands. There are now a considerable number of willing
sellers in this category but a dearth of willing
buyers. Prices for handier fat lamb properties were
thought to be 30% to 35 % below the market peak of
mid 1982, however dairy units until late in the year
sold on a par with 1982 levels. Horticultural development
in the region slowed due to the cost of finance,
however the rural residential property market was
strong in the first nine months of 1985 at prices up to
$200,000 for developed properties. Goat farming
was expanding rapidly and profitably in the region
and there was a considerable development of fish
farming. With a good season, horticultural properties
were expected to hold 1985 levels in the new year,
rather more than other rural property types, however
this prediction is dependent upon overseas markets
and exchange rates.
Across the island in Nelson the sub-branch of the
Institute reports a trying year with rural sector values
having fallen. The effect of high interest rates, rapid
increases in internal operating costs, and much
reduced gross returns appeared to show more in the
second half of 1985 and the volume of sales and sale
242
prices were down. It was thought that net farm income
for grazing and fattening units was down by as
much as 50% to 60%, dairy farms 8% to 10% and
orchards from 10% to 50% according to their type
anC the varieties planted, however there were not
thought to have been any sales during 1985 as a direct
consequence of the reduced incomes. Forestry sales
numbered only seven towards the year's end, down
on volume for 1984 when six transactions were
recorded during the latter half of that year.
In Westland during 1985 there was no clear indication
of any significant fall in farm values,
however there was thought to be a definite hardening
in the market. Dairy farm sales were virtually on the
same level as achieved for the preceding two years,
while sheep and cattle properties were more difficult
to sell, particularly in South Westland.
A declining market particularly for sheep and
cattle grazing and fattening properties accelerated
during the second half of 1985 in Canterbury after a
steady flow of sales in the early part of the year. A
combination of factors including the removal of subsidies,
high interest rates, and the relatively high
value of the New Zealand dollar were believed to
have produced a deterioration in rural land
economics, however there was a general reluctance
to sell farm properties under unfavourable market
conditions. The main body of farmers were thought
to be simply treading water by the year's end, carrying
out various holding operations such as selling
capital stock to main the viability of their operations.
Only the Rural Bank remained as a source of finance
by the year's end in the region and in general terms
values were thought to have declined from the 1982
peak to levels close to the early part of 1981. Well
maintained properties with little additional outlay
required were the easiest to sell. Two price levels were
identified: up to $450,000 for typical 1 to 1.5 man
unit properties and $850,000 and above for larger
holdings of 7,000 or more stock units. Meanwhile the
price differential between good and poor quality
land became more realistic. Forestry concerns began
to realise that they were the only possible purchasers
for hard hill country, whereas in the past such buyers
were expected to pay premiums. Leasing was considered
to be a more attractive proposition as the
eventual purchase of a farm by a lessee was a more
realistic future prospect than in earlier years when
price escalations outstripped saving ability. In the
meantime farm rentals appear to have dropped in expectation
of reduced income and in overall terms
rural values were expected to move closer to productive
worth in the region during 1986.
Fattening/marginal hill country grazing units,
and second rate cropping properties fell in value during
1985 in South Canterbury, however fine wool
(high country) properties continued to attract good
enquiry following comparatively high prices for fine
Merino wool, while irrigated plains properties held
their value better than dry land properties which fell
dramatically in value. The South Canterbury Branch
of the Institute suggests that provincial urban centres
could continue to feel the effect of financial restructuring
in the farming sector throughout 1986 unless
"farmgate" produce prices improve.
1985 was a difficult year for the Otago rural sector
with farm land prices continuing to fall. In North
Otago the problem was compounded by the drought
conditions and in some cases values were thought to
have dropped to about 50% of the levels prevailing in

1983, a movement which has had a devastating effect
upon farmers who have purchased since 1981. By
late in the year however there did not appear to be a
free trading of farms and as with any market there
were apparent contradictions, with fine wool high
country runs selling at higher market levels. In late
1985 the Craig Lynn property which had a 1981
Government Valuation of $2.2 million sold for
$900,000, a transaction which emphasised the need
for farmers to recognise economic trends, and curb
spending as the combination of successive cash flow
deficits, and a falling farm land market can undermine
the viability of even the seemingly strongest
units.
Sales activity in the rural sector in Southland was
at a low level throughout 1985 as a consequence of
lower returns for meat and wool, high interest rates
and the uncertainty of future trends, influences evident
in many other regions of the nation. The actual
■
■
PRACTICE MANAGEMENT and
DEVELOPMENT
income from the 1984/85 year was however better in
many instances than expected, and it was not until
October 1985 with the announcement of the lamb
schedule that a number of farmers realised the
seriousness of their financial position. The
Southland Branch of the Institute predicted that in
1986 banks and stock firms would not be prepared to
accept hard core debt, and accordingly the number
of mortgagee sales were expected to increase
significantly. Pressured sales of good cropping units
were in the range $2,400 to $3,000 per hectare while a
bare land smaller uneconomic unit was reported to
have sold at $1,500 per hectare for bare land. Larger
and poorly located sheep units sold in the province
during 1985 in a range to $600 per hectare or approximately
$100 per stock unit, however the concept of
the willing seller/willing buyer was often absent from
such transactions, suggesting that the true market
value could be quite different.
A residential management workshop specifically aimed
at areas crucial to the operation and profitability
of a modern valuer's practice
JULY 13 - 17 1986
COURSE FEE - $ 725 for early registrations
- A fair day gram held at the University of I3e . Ehglatrl, Amd.dale, I3V
offering c ell t shrly arrl recreatia-al facilities.
- Linti.tEd regi.stratials a1Slm persaal attaltia and mm imm pa i ri ia ; r .
- Designed aryl a xdiat e 17y: Beasley an Ct. s Pty Ltd.
Firarcial Mit Dorm e Omtre,
University of lbw Ehglarrd.
TaIqln-e (067) 72 5199
BROCHURE with full details and application form write to
GENERAL SECRETARY, NZIV, BOX 27146, WELLINGTON.
243
i
■

Book Launching of "Land Compensation"
By Squire Speedy
East of Ruapehu beyond the Kaimanawa Range
(that is the one that often has a sprinkling of snow on it
in the winter), lies what was the largest sheep station in
the North Island, Ngamatea. It is nestled in a broad
valley rising from 2,500 to 5,000 feet. During the
between-wars years, about the time of the Great
Depression, there came to that high country a lonely
shepherd, known only as Jeff, who soon learned to
love that beautiful place. When he heard that someone
had come to buy it he gave the station owner's wife,
Mrs Winifred Roberts, a poem called `No Sale'. I have
used it as my frontispiece as it sets the mood of the
human problems that are associated with compulsory
acquisition and land compensation.
"So you want to buy my farm" he said
"You'd buy my farm" said he
"Well, how would you value the light and shade?
What is your price for the dream I've made?
And how would you buy on size or grade
The children whose shouts you hear?"
"You haven't the money to buy" he said
"This bit of a farm" said he
"You haven't the money to buy the worth
of the joy and prayer, of the death and birth,
The power that blessed this fruitful earth, And
the love that made it dear".
The compulsory taking of land, or the threat of it,
for the genuine unwilling seller, is a truly traumatic
experience. A dispossessed owner needs, and is entitled
to expert professional advice.
The 1981 PWA has given registered valuers certain
statutory rights (hence monopolistic rights), and
with them go professional duties and responsibilities.
It behoves all valuers and negotiators undertaking
Comments by the author
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work in this area to know the rules of the compensation
`game'.
The task is not easy, because of the need to apply
the provisions of the Act and a host of legal
precedents and professional practices to the particular,
circumstances surrounding the owner's
plight.
Land Compensation is intended to serve as a
guide for all concerned in assessing in a single lump
sum of compensation the amount that is to be
Society's measure of that `light and shade and for the
dreams that were made'.
The book arose out of the Institute of Valuers'
desire to publish a series of texts of which Rod
Jefferies Land Valuation in New Zealand Vol. 1
(which has become the valuers' Bible), was the first.
Land Compensation was originally going to be merely
one chapter in Volume 2 of the series, but like Topsy it
just `growed and growed'. It was impossible to do
justice to this subject that is so important to the individual,
dispossessed owner and the complex issues
in just a single chapter.
The principle of eminent domain that the
sovereign may take land of a subject for the alleged
good of the realm, but must pay a just amount of
compensation, has its roots in Magna Carta, but the
idea can be traced back to Roman and Biblical times.
In addition to providing a solid technical diet, I
have attempted to give flavour to the subject by giving
the fundamental principles and philosophy and
have added a sprinkling of its history. It has been garnished
with a detailed contents, lists of cases and
statutes, a full index, and an appendix of relevant
sections of the statutes for quick reference.
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The Act lays down not only the series of rules that
limit the amount of `full' compensation, but also
gives new avenues for compensation for losses sustained.
There are times when the rules when applied to an
owner's special circumstances require hypothetical
matters to be considered and assessed; described by
one Court as the need for `imaginary' valuations;
yet, these must still be based on hard facts.
My research included, amongst other things, the
consideration of hundreds of cases to extract the
common law legal-valuation principles; but I was
able to trim those cited to about 125.
From practical experience gained over 30 odd
years (some very odd indeed), before my retirement
from this form of endeavour, I realised that many of
the issues that had caused so much trouble (including
at times soul searching and heart burning), had been
finally resolved by digging for facts, deep cogitation,
considerable research, and often by negotiation. I
have tried to weave some of those lessons from life
into the fabric of the text.
Some topics had to be chewed over for a long
time; some points broke into my sleep; some solutions
popped up while I was having a shower; others
were mulled over while I was cutting the grass. I expect
you have all had similar experiences when
pondering a problem. But when writing a book you
cannot wait too long for inspiration: there is no
substitute for regular honest mental perspiration.
Probably the hardest work was done in the
stillness of the small hours, when the stars were
fading in the dawning light, and as an early bird I
used to get up to catch my book-worms!
245
I think it was Lord Byron who said: `Easy
reading, damn hard writing'. Difficult issues included
the need to disregard the prospect of the
public work; disturbance and damage; town planning
limitations; future potential; easements for such
things as Eiffel-tower-like pylons or natural gas
pipelines; and air space rights. Very special consideration
had to be given to the tricky issue of roadwidening
and betterment. The newly introduced provision
of equivalent reinstatement meant special
research. Then there was the knotty problem of
Maori land to be considered.
Come to think of it, I did not find any of it easy.
But once well on the trail there was no turning back.
Many of you have climbed your particular Everests,
so you may have some inkling of what is involved in
this kind of project.
The new Act encourages negotiations both for
essential works and voluntary sales. This is where I
hope the book will be found to be very useful: serving
as a guide to valuers and negotiators in helping them
reach just and adequate settlements. And when that
is not possible (for essential public works forceably
taken), it will still help the combatant parties.
I think it is far better, if at all possible, to negotiate
and settle for an amount you can live with, and get on
with the job of living, rather than soldier on against
great odds without good reason, with the risk of ending
up with a decision you cannot live with. Litigation
is usually delayed, worrying in its uncertainty,
and expensive in time, money and emotional energy.
Full pursuit can test the backbone of the hardiest
claimant. Grandiose dreams will soon be cut to reality
in the spotlight of the judicial process.

Presidential Report
On 13th Pan Pacific Congress of Real Estate Appraisers, Valuers and Counselors
The Pan Pacific Congress held in Honolulu, Hawaii in February thisyear was attended by the following New
Zealanders:
Kevin Allan Wellington
Robert & Kay Fisher Wellington
Evan & Dale Gamby Auckland
John Gibson Wellington
lain Gribble Wellington
Roger& A visHallinan Christchurch
Malcolm Hardie Auckland
Graeme & Heather Horsley Wellington
Rodney & Jan Jefferies Auckland
Bruce & Margaret Morison Taupo
Stanley & Rosemary Ralston Wellington
Mike Sellars Wellington
Mervyn Svensen Auckland
Gordon&Joan Whale Christchurch
Dixon & Anne Wright Hamilton
It was pleasing to note that the Presidential trio were all in attendance as was the General Secretary. The
General Secretary ran an information stand complete with video, travel brochures, publications etc. throughout the
entire congress and received very favourable comment on our promotion of New Zealand as a venue in 1988.
We hosted a cocktailparty which featured New Zealand wines including kiwifruit wine and New Zealand beers
for about 100 guests on the Wednesday night of the congress. This was not only an enjoyable function but a
superb promotion for New Zealand. We selected people from all the delegations and in true New Zealand
fashion I believe weput onprobably the show of the week. All the New Zealand delegates had T-shirts that had been
arranged by Roger Hallinan, they were white with a black stripe, had a black fern and were embroidered with the
words Christchurch, New Zealand 1988. Theshirts were also in some demandandldon't think many of
them found their way back to New Zealand.
At the Congress Board Meeting we received a direct appeal from the Japanese delegation for translation
services to be made available at the next congress. The Japanese have undertaken to assist in the cost of such a
service and they have said that if translation facilities are provided then they believe upwards of 100 Japanese will
attend the congress.
We raised with the Board the question of having invited speakers to present plenary papers, speakers who might
be outside of the Pan Pacific participating countries. This was accepted by the Board on theproviso that there was a
continuation of multiple paper workshop sessions so as to allow full participation of all supporting countries. The
Board also appointed as Chairman/Co-ordinator of the 14th Pan Pacific Congress, Mr A. L. MacAlister of New
Zealand. It was suggested at the Board that Singapore, Indonesia and Hong Kong should be approached by the
Chairman/Co-ordinator as possible future members of the Pan Pacific movement. This is something we should
look at very quickly.
Turning now to the working sessions of the congress, these were poorly attended. There were only 350
delegates in Hawaii and the plenary papers and workshop sessions were certainly the worst attended of any Pan
Pacific I have been to. The New Zealand papers were all of a good standard, were well presented and I am
pleased to say that when a New Zealander was speaking he was generally well supported by other New
Zealanders. Even the social functions were poorly attended, the best attendance being only 70% of the delegates of
the conference. The workshops which saw multiple papers were badly organised, the first speaker invariably
running over time so that subsequent speakers were moved down to talking for five minutes and even less on
some occasions. The idea of multiple speakers I think is very good, but they must be controlled as to speaking time.
Honolulu was an expensive venue, the weather was not particularly good but as an exercise inpromotingNew
Zealand as the venue for 1988 it was very successful and I would like to think that given sufficient resources to
continue promoting New Zealand over the next two years and with some innovative planning by the Congress
Committee we could feasibly aim at an attendance of upwards of 800 persons.
246
G. J. Horsley

Valuers Registration Board
The Board wishes to draw to the attention of
Registered Valuers who may have the occasion to appear
as expert witnesses at its Inquiries, that there are
certain standards which it wishes to maintain in the
presentation of evidence before it.
In particular the Board has noted at recent
Inquiries that Valuers giving evidence of the comparability
of one property with others have frequently
failed to reveal the depth and reliability of
their own investigations of the data. Generally
speaking the property which is the subject of the Inquiry
is described in detail and has obviously been
closely examined by all concerned, but evidence concerning
properties quoted as comparable sales is
usually much less specific, and little or no guidance is
given to the Board as to the degree of investigation
which has been undertaken.
For example it frequently appears that nothing
more than a "front gate" inspection has been possible,
but witnesses usually draw no distinction between
such inspections and others where the property
has been examined in close detail. It will be apparent
that a "front gate" inspection can easily fail to reveal
significant information which might affect the sale
price and value of a property, and cannot indicate
that a house may or may not have been repiled, that
the kitchen and bathroom services may or may not
have been extensively modernised, or that the
general standard of internal presentation is good or
bad. All these matters may have had a direct bearing
Practice Note for Witnesses
upon the sale price and upon the degree of real comparability
with the subject.
The Board very well understands that a detailed
physical inspection of every property which a Valuer
wishes to quote as a comparable may be difficult,
and indeed is often impossible. The Board has no
criticism of Valuers who, after reasonable efforts,
put before it the best data they have been able to obtain
even if that data is limited in its quality.
However, what the Board must understand clearly is
the amount of weight which it can fairly place upon
the comparability claimed for each example. Thus
the Board expects that Valuers who appear before it
to give evidence shall clearly distinguish the source
from which their data is obtained, for example by a
detailed personal inspection, a general external view,
a "front gate inspection", micro-fiche data only,
etc. etc.
Inquiries at which witnesses may appear before
the Board are often of such consequence as may affect
the future lifelihood, professional status and
career of another Registered Valuer, and the Board
believes that it has an obligation to ensure that such
an individual receives the fullest and fairest Hearing
which is possible. Accordingly it does not seem
unreasonable that it should demand the highest professional
standards from all Registered Valuers who
may be called to give evidence before it, and it intends
this Practice Note to assist such witnesses in their
preparation of evidence in the future.
MEMBER OF THE ARCHITECTS EDUCATION AND REGISTRATION BOARD
In May 1985, Mr Ron Reid of Rotorua, was appointed to the Architects Education and Registration Board
fora three year term. It is the branch's understanding that this is the first time an appointee with a background in
valuing has been selected for this position.
Ron, aged 52, joined the State Advances Corporation as a Cadet in 1951 finally completing his Diploma in
Urban Valuation in 1962 having worked for a firm of architects in the interim. In 1967 he joined the firm of
Barfoot& Thompson, Real EstateAgents as their Valuer at Takapuna, before moving to Rotorua in 1969, and is
currently a principal in the firm of Reid & Reynolds.
247

Valuation Enquiries Automated
Client enquiries on property valuations throughout New Zealand became automated with a "takeaway"
printout. The Valuation Department's on-line computer enquiry system has been linked to all 27 district offices
throughout the country.
The system was achieved through the joint efforts of the department and Government Computing Services.
The Christchurch valuation district office was used as the pilot centre from mid-1983. This enabled both
organisations to "iron out" wrinkles prior to application nationwide.
The role of the Pipitea Computer Centre in Wellington is vital in the
Valuation Department's new on-line computer inquiry system. The
centre's communication room is a mass of terminals to the 27
valuation district offices.
The Valuation Department's role involves the collection
of information about land and property
values. In the early years this was handwritten into
books at district office level. Typing vast quantities
of information was not superseded until 1952 when a
mechanical system known as "Bradma" which
involved printing from embossed metal plates was
introduced.
In the late 1960's a computerised system was
developed and the transfer of valuation roll data was
completed by 1972. Paper valuation assessments
were now computer printed. Advances in technology
and database size determined the introduction of a
random access system in 1975. This laid the ground
for further developments, one of which has been the
new on-line enquiry system. It is now possible, by
just knowing the name or street address of a property
owner to recall the base information on property
value, age and type of dwelling, condition and use,
size of the dwelling, and legal description of the site
without having to refer to printed indexes.
Such information supplied through a different
medium is vital to local authorities in assessing rates
and for town planning purposes. About 80 percent
of New Zealand local authorities use the land value
as a rating base. It is also very necessary for a number
248
of other organisations and quasi-government
departments. In fact the department's 1985 annual
report lists 79 such organisations that make regular
use of the information now stored on its computers.
These are as diverse as pest boards and the Fire
Services Commission to the Earthquake and War
Damages Commission and museums.
But for the average citizen the system provides
quick information on a property (domestic, commercial
or rural) that may be for sale. The Institute of
Valuers receives fortnightly updates on recent sales
information that it supplies to subscribers. Lawyers
need access to the system when conveyancing and the
information is also of interest to accountants.
For each computer enquiry, the local authority
district to be searched must be specified. This means
that a nationwide search for properties owned by an
individual would involve a separate enquiry for each of
the 232 local authorities. The enquirer has to have a
legitimate reason for requiring the information.
The department releases six monthly statistics on
the real estate market. This base information is used by
the Department of Statistics as a major component
of the Consumer Price Index, the country's official
gauge on economic, financial and consumer
trends.
The Government Computing Service role in the
development of the system has been a major factor in
successfully making its application nationwide. The
expertise of staff and the ability to "tailor" customer
requirements to known technology in this area have
contributed to the national link.
Mr Ralston, who attended an international
seminar at Harvard University in the United States in
August, said New Zealand, despite its small size, was
keeping abreast of much larger nations in the use of
computers in valuation procedures.
"The mass appraisal techniques we are developing
here in our research unit are of world standing,"
he said.
The department has developed programmes for
use in the mass appraisal process. One is the facility to
estimate house values for the normal five-yearly
revaluation of all properties. Another programme involves
the adjustment of existing values. These processes
utilise current information on each property.
Public enquiries total 200,000 annually, the total
number of valuations on district valuation rolls for
1984-85 was 1,294,600 (from annual report).
This low-profile department's contribution to
New Zealand's land base information is considerable
in any terms. By providing a property valuation base
for rating and taxing purposes and independent
valuation advice it is fulfilling its role. That it is also
utilising the latest developments in computer
technology to produce this data, economically and
efficiently is to the long term benefit of all taxpayers.

On-Line Enquiry System
Hon. Koro Wetere: Minister in Charge of the Valuation Department
Opening the "On-Line Enquiry System" of the Valuation Department, at its Christchurch Office, State Insurance Building.
116 Worcester Street at 9.00 a.m. on Wednesday, 4 December 1985
The actual work of the Valuation Department is
probably little understood by the public.
Ratepayers see a revaluation as usually leading to
increased rates, or high rentals. While others will
dispute that a valuation is too low. Especially if they
want to take out a mortgage, or are to get compensation
for a compulsory land acquisition.
Nevertheless, our valuation system is looked on as
a model by many overseas administrations, and its
computer system is as up-to-date as any in the world.
Computer methodology has helped change the
ability of the department to give a much better service
to its clients, and a number of local bodies are
participating now in an experimental pilot scheme.
If this pilot scheme is successful, the Valuer-
General will be able to offer annual revaluations to
local authorities, as an optional service, within the
next two or three years.
I am here today to open the Valuation Department's
"On-Line Enquiry System", which is
another step in using modern technology.
With it, the public, and the Department's clients,
will get a more efficient information system on
valuations of their property.
The present printed district valuation rolls are no
more, and are to be replaced by immediate access to
the information in the computer.
At the end of this function we can all see for
ourselves the capabilities of the new system.
This is the latest. But it is only one of many services,
provided by the Valuation Department. The
Department itself was set up in 1896 to give a full
valuation service to Central and Local Government,
and provide estimates of the value of properties for
the public.
To this day, the main use still of the valuations, is
to provide the basis for New Zealand's local body
rating.
I am sure you all agree with me that no one really
likes to pay rates, and, over the years, there has been
a large number of criticisms, complaints and objections.
There has, therefore, been a considerable number
also of reviews of Royal Commissions and public
forums.
But all these concluded that the alternatives which
were suggested, would make more anomalies than
they would resolve. This surely is a solid endorsement
of the soundness of our valuation and rating
system.
The key factors in all this are the independence
and the impartiality of the Department and its
assessments. Plus, the right of every citizen to
challenge an assessment an important right which is
laid down in the statutes.
Recent publicity in Christchurch and Wellington
has focussed attention on reported anomalies in the
1984 property revaluations. Rates revolts and public
249
meetings followed, which led the Councils concerned
to undertake reviews of their rating systems.
But let me make it quite clear, that the system of
five-yearly revaluation of properties, should not be
blamed for the changes in rates in the different
suburbs and localities.
A Government Valuation is the Department's
estimate of the market value of properties at a particular
data.
Five years later a revaluation is made, but, in
those five years, property values alter at different
rates in different localities and according to a wide
variety of influences.
The Department has clear evidence of property
sales to support its values, and few owners would
dispute the valuation if they put up their property for
sale.
A revaluation merely reflects the changes which
have taken place over a five year period between one
locality and the next.
In the recent Christchurch and Wellington
revaluations, there were very significant changes in
property sales, and, therefore, the previous valuations
were not relevant.
The solution to this is the need for more frequent
valuations, which would better reflect the changing
market from year to year.
As I said earlier, the Valuation Department is
moving towards more frequent valuations in the near
future.
The Department also offers other services to local
rating authorities.
These include valuation information which is now
on computer tapes: Cadastral plans which combine
the boundary and valuation data of a property: A
rate demand printing service: and certificates of
equalised values.
The Department also assesses land tax, and
stamp, gift and estate duties.
It provides valuations and advice, for local and
Central Government to set rentals for Government
office accommodation, or to assess securities for
Government mortgage lending, and is also involved
in feasibility studies for major development projects.
Impartial advice for transactions under different
land laws, is also given for the administration of
Maori land.
The research division of the department compiles
section and house price indexes, and produces
reports on the property market, which are widely circulated.
The property records are especially used by local
authorities, and, in more recent times, by private
businesses, but with the restriction to protect the
privacy of the owner.
As a second stage of development of this "On-
Line Enquiry System", the Department will make a

great range of information available on a commercial
basis.
But, first of all, strong safeguards must be set up
to establish a correct balance between the
individual's right to privacy, and the public's right to
access to official information.
There are 200,000 enquiries from the public each
year, and 1,294,600 valuations on the district valuation
rolls for 1984-85.
The "On-Line Enquiry System" was set up in
On 16 August 1985 the inaugural meeting of the
FIABCI NZ Chapter took place and New Zealand
became one of 70 associations in 44 countries working
under the FIABCI banner.
FIABCI is the acronym for the original French
name Federation Internationale des Administrateurs
de Biens Conseils Immobiliers. The Federation was
founded in 1951 and the name was subsequently
changed to Federation Internationale des Professions
Immobiliers but the original acronym was retained
for identification purposes. Translated, this
Association is known as the International Real
Estate Federation.
The membership of FIABCI consists of valuers,
developers, surveyors, real estate personnel, indeed,
any person who has any relationship with real estate
at all is welcome within the membership.
An annual world congress is held each year in a
different FIABCI member country. In 1986 the congress
is to be held in Taipei with Copenhagen and
Melbourne being the meeting places in 1987 and
1988. At this meeting more than 1500 members meet
to transact international business, update themselves
on the latest developments in international marketing,
valuation, management, syndication and counselling
skills and to establish new business
relationships amongst themselves. A member of
FIABCI travelling to the congress may apply for tax
benefits and also obtain group tour rates.
Every member of FIABCI receives a membership
directory which lists by country and city the name,
address, telephone and telex number of every
FIABCI member and describes their area of
specialisation. Members find the diary which is updated
annually an invaluable business tool. Through
it they can market properties internationally and
develop a network of corresponding agents around
FIABCI NEW ZEALAND CHAPTER
Christchurch as the pilot centre, and is now linked to
the 27 district offices throughout the country.
In 1896, an independent valuation authority was
seen as necessary. Today, this is still true, and it is
essential to maintain an impartial and accurate service.
We have a competent and economical professional
service, a well trained and experienced staff,
and the very latest facilities - which is why we are
here today.
It is with much pleasure therefore that I declare
the Valuation Department's "On-Line Enquiry
System" officially in operation.
the world. The directory is the only one of its kind
available in the world and cannot be purchased by
non-members.
FIABCI has recognised that the future of the
Federation is dependent upon its younger members
and accordingly it gives a strong emphasis to the
education and training of younger people. Group 35
is a group of younger members of FIABCI under the
age of 30 years. Special programmes are provided for
these members at FIABCI conferences. In addition,
there is an educational exchange programme which
enables younger members of the real estate profession
to live and work as trainee real estate professionals
in other countries and also to participate in
university sponsored international real estate
summer school programmes in Europe and the
Americas.
The interests of the Asia Pacific Basin are specially
catered for by an Asia Pacific/APREF council within
FIABCI. This council holds a regional congress every
second year and in 1984 the congress was held in
Surfers Paradise, Queensland. Study tours within the
Pacific are also arranged through the Asia Pacific/
APREF council.
FIABCI publishes a four monthly journal (FIAB-
CI Reporter) in four different country languages
(English, Spanish, French and German). This
magazine informs members of future FIABCI
activities and is also used for promotional advertising
on an international basis.
In New Zealand the FIABCI NZ Chapter is an
independent body which is happy to accept members
from any profession or body which is related to the
land. Any inquiries regarding membership should be
directed to the Secretary General, FIABCI NZ
Chapter, P.O. Box 5663, Auckland.
PUBLICITY & PUBLIC RELATIONS COMMITTEE
END OF YEAR REPORT ON DIRECT MEDIA CAMPAIGN
Members of the Institute will now be aware, from
the open letter published in the June 1985 issue of
"The Valuer" that the Institute's Direct Media
Advertising Campaign has been running for some
time, and according to an internal survey (of a random
selection of 10% of the membership), meeting
the demand for initial, basic media promotion. It has
been difficult to categorically measure any improvement
in the public's awareness of valuers at this early
stage, however the internal survey did indicate that
on occasion there had been mention of the campaign
By G. Kirkcaldie, Chairman
250
by clients, and fellow practitioners. A limited
number of critics felt that some valuation services
were not covered by the campaign, however it is important
to realise that all programmes of this nature
must have a starting point, and it is the expressed
wish of the Publicity and Public Relations Committee
to pursue other avenues of our activities within
the ensuing months.
Council at its mid-year meeting in Wellington
during October endorsed the appointment of
Charles Haines Limited for a further term of 12

months. Following a presentation by the agency it
was determined that some research should be undertaken
by way of a public survey by a professional
survey agency. Negotiations are now reaching finality
with Survey Research Limited to conduct a
telephone enquiry (during the weeks leading up to
early December 1985) of selected property owners
who have been involved in transactions during the
period mid 1984 to late 1985 with individuals selected
by random extract from the Institute's sale retrieval
Valpak System to obtain responses from 400 residential
property owners, 100 commercial property
owners, and 100 rural property owners. Detailed
ADMITTED TO INTERMEDIATE:
Membership
questionnaires for each of the three respective property
type respondents have been prepared, and the
primary task of the research is to determine the
public's awareness of the valuing profession, ascertain
the ages, sexes and employment areas of valuation
customers, and extract comments about our
reliability. It seems that a considerable amount of additional
information concerning the profession, its
status and efficiency will also be gained.
Once the survey has been completed and analysed,
Charles Haines Limited will prepare a campaign
which is likely to include the production of information
brochures.
Bilbrough, N. R................................................... Hawke's Bay
Brown, B. T.......................................................... Wellington
Boyd, C. D............................................................ Rotorua/Bay of Plenty
Calder, (Ms) G. A ........................................... Auckland
Castle, P. M. R .................................................... Central Districts
Collings, L. V....................................................... Wellington
Dick, T. R ............................................................. Otago
Edney, T. E .......................................................... Wellington
Evans, A. H.......................................................... Auckland
Freeman, G. D ..................................................... Canterbury/Westland
Head, S. B....................................................... Auckland
Hinton, M. A .......................................................Rotorua/Bay of Plenty
Irik, J. Y................................................................ Wellington
Julian, T. W ......................................................... Wellington
Koomen, (Ms) D. M............................................ Auckland
Linn, B. W ............................................................ Waikato
Little, M. J ...................................................... Southland
Marinovich, M. I .................................................Auckland
McKenzie, A. G ................................................... Central Districts
Mac Niven, F. M..................................................Waikato
Milne, R. H .....................................................Southland
Moffat, G. H...................................................Southland
Murdoch, D. K.....................................................Central Districts
O'Shea, (Ms) K. L ...........................................Hawke's Bay
Pope, B. M............................................................Otago
Van der Vliet, (Ms) M. W....................................Otago
White, D. A ..........................................................Central Districts
White, R. E......................................................Waikato
Wigmore, H. J......................................................Rotorua/Bay of Plenty
Wright, A. E .........................................................Hamilton
Wright, M. J .........................................................Canterbury/Westland
ADVANCED TO ASSOCIATE:
Akuhata, W.....................................................Auckland
Annandale, D. D.................................................. Rotorua/Bay of Plenty
Baker, I. D.............................................................Northland
Bennett, P. H ........................................................Auckland
Bird, R. J ...............................................................Waikato
Blucher, K. J .........................................................Waikato
Bodger, B. M ........................................................Nelson/Marlborough
Bristow, M. J ........................................................Auckland
Butler, P. J ........................................................... Rotorua/Bay of Plenty
Churton, J. A........................................................Auckland
Cuneen, P. J......................................................... South Canterbury
Fea, D. B......................................................... Southland
Fouhy, M. J.......................................................... Waikato
Graham, C. E........................................................Waikato
Hood, T. B............................................................ Overseas
Kerr, A. S .............................................................. Wellington
251

Lim Gnee Kiang ...................................................Overseas
McDonald, G. J ..............................................Canterbury/Westland
McKeage, I. D ......................................................Nelson/Marlborough
Parry, J. T. O ..................................................Northland
Rae, G. C ........................................................ Waikato
Saunders, D. J.................................................Waikato
Tay, S. S .......................................................... Overseas
Thomson, P. D .................................................... Waikato
Western, P. J ........................................................Nelson/Marlborough
RETIRED:
Cameron, E. A..........Rule 14(1).....................Central Districts
Foote, G. A ...............Rule 14(2).....................South Canterbury
Ford, A. K ..................Rule 14(2).......................Canterbury/ Westland
Garton, E. H ............. Rule 14(2) ....................Northland
Gibson, A. E ............. Rule 14(2) ....................Rotorua/Bay of Plenty
Johnson, E. F.................................................. Auckland
Mackenzie, T. D ........ Rule 14(2) ......................Wellington
Patterson, K. R ......... Rule 14(1) ....................Central Districts
Sharp, W. A.............. Rule 14(2) ....................Otago
Wilson, A. R .............Rule 14(1) ....................Waikato
REVERTED TO NON-PRACTISING:
Carroll, M. F. J ................ Auckland
Baker, I. D ......................Northland
Beggs, N. W.......................Otago
Borich, S. N ....................Auckland
Armstrong, I. D ...................................................Taranaki
Carroll, M. F. J ............................................... Auckland
Coradine, R ....................................................Northland
Holmes, D. J ................................................... Southland
Kolff, L. M...................................................... Canterbury/Westland
McAlister, M. C.............................................. Overseas
Mortimer, D. M .............................................. Auckland
Mossman, M. D................................................... Canterbury/Westland
Muir, G. W ..................................................... Auckland
Oatridge, P. L ................................................. Auckland
O'Styke, W. F ................................................. Wellington
Plummer, R. E..................................................... Central Districts
Rowland, D. W ............................................... Canterbury/Westland
Sampson, S. K..................................................Auckland
Snowden, W. J................................................ Auckland
Ward, P. M ..................................................... Wellington
Welsford, A. C................................................ Canterbury/Westland
REMOVED FROM ROLL OF MEMBERSHIP:
Howard, P. J .................. Wellington
RESIGNATIONS:
Kissick, A. F .................... Taranaki
Lim, Thiam Hock ...........Overseas
Masterton, D. J............... Auckland
Cameron, B. K................South Canterbury McGregor, C. J............... Hawke's Bay
Cochrane, P. E................ Northland Millar, J. R ..................... Auckland
Duff, D. C ...................... Christchurch Morris, J. B..................... Southland
Ganley, R. M .................. Wellington Oliver, R. T..................... Auckland
Gifford, A. G.................. Canterbury/Westland Power, M. P...................... Rotorua/Bay of Plenty
Glasgow, P. J.................. Overseas Reddens, S. J ...................Auckland
Godfrey, D. M ................ Auckland Reid, J. R.........................Hawke's Bay
Handford, P. R. T ..........Canterbury/Westland Roigard, H. L..................Rotorua/Bay of Plenty
Hardwick, G. M .............Auckland Rumens, P. J ...................Canterbury/Westland
Honore, C. E.................... Auckland Skeet, S ............................Hawke's Bay
Jones, C. L...................... Rotorua Spring, T. W ..................... Northland
Kensington, B. G ............. Central Districts Whitaker, B. J .................. Wellington
DECEASED:
Davidson, N. J ................ Auckland Rolle, R. H....................... Central Districts
Lawson, G. P..................... South Canterbury Roy, D. B......................... Wellington
Mills, W. R...................... Otago Taylor, S. W .................... Auckland
RE-ADMISSION:
Kerr, R. J ......................... Canterbury/Westland Lim Thiam Hock..............Overseas
252

Professionals in the 180s
Thefollowing is a reported speech in a recent copy
of "Chartered Surveyor Weekly" from the current
President of the RICS.
Some of you may have already read this article
and compared the British situation with that currently
pertaining in New Zealand. It enables a comparison
with things happening now in New Zealand
and in this profession including:
1. Dismantling of scale fees.
2. Public perception of valuers (surveyors).
3. Government attitude to professions and competition
generally.
4. The need for self promotion of the profession.
RICS Presidential Address
PAUL ORCHARD-LISLE, THE 104th PRESIDENT OF THE RICS,
5. Standards of competency.
6. Internal disciplinary measures.
7. Removal of any restrictions on advertising.
8. Changes in business environment e.g. merging of
valuing practices with other financial services etc.
You will appreciate the differences between RICS
and NZIV; whereas in New Zealand recognition of
the Institute and the registration process of valuers is
covered and accorded by legislation, the British have
a Royal Charter and their multi-disciplineprofession
sets its own standards for recognition and exercises
internal disciplinary measures.
GAVE THE FOLLOWING PRESIDENTIAL ADDRESS AT AN ORDINARY GENERAL MEETING OF THE INSTITUTION
I regard the presidential address as a personal
statement and not an implied or intentional representation
of the beliefs or policies of the Institution.
I make that introduction to help you take your
own view of what I say. When I suggest something
with which you profoundly disagree you can regard
it as no more than the meandering of an over exercised
mind. You may feel able to accept, if you are
charitable, the kind of defence put forward by
learned counsel in a recent action wherein he opened
as follows: "In defending my client against the
charge of libel I shall show that the article was not
written by Jones. Or if it was, the passages in question
were not. Or if they were, that he did not mean
them in the plaintiff's sense. Or if he did, the
passages in question had substantial truth. Of if they
had not, my client did not and could not at the time
know them not to be true. Or if he could and did, we
could not then and cannot now know them to be untrue.
Or if we can and could, and he could and did,
and they had not, and he did, and they were, and it
was, then my client is not Jones."
That is very approximately where I have got to in
this matter, perhaps.
Many of you in this audience will no doubt have
read Professor Thompson's excellent history of our
Institution.
It contains the following passage: `Customers for
services became either public companies or corporations,
sapping the dominance of aristocratic patronage
and impelling the professional man to independence.'
It was written about the late 18th-century but even
today there must be few of us who do not recognise
certain symptoms of aristocratic patronage among
our clients. What I fear is sometimes difficult is to see
the true independence of the professional man. Too
often objectivity is sapped by over dependence upon
a single client. There is too frequently fear of loss of a
client or business as a result of declining to take on a
job, despite knowing in one's heart one is either unsuited,
or too busy or that there is a conflict of interest.
Usually the truth emerges, to one's personal
detriment and to the disadvantage of the profession as
a whole.
253
I find that conflict of interest is one of the areas
that concerns me most at present. My concern is not
confined to those surveyors who stretch their conscience
to convince themselves that they could act in a
particular case. It is more about the mood of the
media and of the population at large which seem
determined that all motives are entirely selfish and
that any conflict automatically demonstrates impropriety
and, should have been foreseen. If, broadly,
that appreciation of the lay mind is fair, it surely puts
us on our guard to conduct our affairs with great circumspection.
It is one of the reasons why I am concerned at the
concept of surveyors linking with merchant banks
and others in the financial services industry. I believe
that the public and the media will find it too difficult
to put their faith in the concept of interdepartmental
confidentiality that is conveniently described as
Chinese Walls. I am mindful that it is your concern
when your neighbour's wall is on fire.
There is a further passage from our history that
suggests that not all our problems are new: `Men who
felt they were properly and extensively trained were
in jeopardy because the public confidence was being
undermined by the semi-trained and the quacks,
whose fee undercutting and irresponsible behaviour
was spreading a reluctance to employ professional
men.'
That comment was in fact made about the year
1866 but it represents a situation many of our
members face at this time. Public and government
preoccupation with fee-cutting is playing into the
hands of the semi-skilled conveyancer of bulk wisdom,
and it is doing so to the detriment of professional
skills, independence of thought and overall
quality of advice. The populist view that `cheapest
must be best' is encouraging the bulk selling of
professional advice based on the slimmest research
and, to hark back to what I said a moment ago, it increases
the pressure on members to ignore conflicts
of interest.
FEE-CUTTING FOLLY
Consciously or unconsciously, those who promote
fee cutting are undermining the traditional

standing of the professional man. Ultimately this
must be to the public disadvantage since to erode
public confidence in a professional is effectively to
devalue the advice he gives and to discourage high
quality service.
I do not seek to argue for the imposition of scale
fees or for the inhibition of fair competition.
However, I believe that, particularly in placing central
and local government contracts, and in corporate
decision taking, there is too often a failure
properly to consider and state clearly the services required.
Too often an invitation to bid is sent out
widely without considering whether the recipient has
the depth of knowledge needed to discharge the brief or
is in a position to make the input required.
There are far too many cases of a fee quotation
being made without an express statement of the services
needed properly to discharge the remit. The
whole concept of fee tendering is an area to which
our Institution needs to address its thoughts. My
preoccupation, however, is to ensure that in submitting
ourselves to competition we retain independence
and quality.
The Institution's relationships with Whitehall
and the Houses of Parliament are probably more
comprehensive now than they ever have been. Even
so there is an almost unbelievable lack of understanding
in government about surveying and indeed
about the professions generally. I have recently
received from a researcher a report on public attitudes
to the profession at large. The results are
disturbing-
There is a remarkable degree of unanimity among
civil servants, media representatives and business
organisations who pass an invariably harsh judgement
on the professions. They speak of the professions
in such phrases as `defence organisations', or
`they try to generate an aura of sanctity'. Perhaps the
most telling remark came from a leading and leftwing
socialist who said: `We have a lot in common.
We're both opposed to free enterprise.'
You and I may not think such comments are true
or justified but I am satisfied that they are representative
of beliefs sincerely held. Collectively such impressions
explain the attitude and actions of the
government, media and some clients. My researcher
has made some pointed enquiries for me about our
own Institution as opposed to the professions at
large.
Generally the RICS is seen as a supervisory body
with a task of setting examinations for would-be
members. Beyond that there is a vagueness about any
contribution towards the national good. There is
little understanding of any role we may have as promoters
of efficiency and of standards. If that is so,
the Institution is not doing enough to command the
respect and loyalty of its members. We clearly have
to develop a far more positive and wordly image,
which does not necessarily imply changing what we
do, but rather that we must do it more publicly.
We need to reflect on the lack of understanding of
the professions and of our Institution at the same
time as we contemplate official attitudes to industry
and business at large. Clearly the present government
believes in easing commercial restrictions -
witness the move towards Sunday trading, the review
of licensing laws, general privatisation and so on.
254
WORLD CONTEXT
Government points out that the world economy is
forcing industry to adjust to meet market demands
and to improve efficiency. Traditional industries are
going through an agonising period and the levels of
unemployment in this country seems to me in human
terms to be unacceptable and potentially a threat to
our civilisation.
By contrast my researcher found that in many
quarters there is outright jealousy of the position of
professionals. There is a feeling that professionals
are unreasonably well off. They are comfortable
without having to work hard and without having
contributed particularly to the national well being.
The government's view is that professionals
should be no exception to the need for ultra efficiency
and total competition. Officials have constantly
repeated to us that increased competition is
the keynote. There is no doubt that the impetus for
the overall drive to stimulate competition comes
straight from the prime minister herself.
TIME FOR A SHAKE-UP?
Seemingly the possibility of an in-depth review of
the professions has been bubbling in Whitehall for
more than 10 years. The Monopolies and Mergers
Commission made a recommendation to this effect
in about 1970 but serious attention has only been
paid to the situation since the present regime was reelected
in 1983. Government's attitude is that the
professions must be shaken up, on the grounds that
many of the restrictions that are thought to be imposed
on members are not ,in the public interest and
that they curb competition.
It is evident that a great deal of faith is placed in
the Office of Fair Trading Review announced on 23
July this year. Administrators claim the announcement
has been widely welcomed and they see the
ultimate report as a passport to sophisticated competitiveness
and to sleek streamlined institutions all
rendering the best possible public service. Perhaps
the interesting statement to us is that they hope to
avoid any parliamentary legislation.
The inference is that we should, having taken on
board the government's determination to expand
competition policy, put our own house in order.
There is considerable doubt whether the Office of
Fair Trading will complete its programme of reviews
by August 1986. There is ample opportunity in which
to decide for ourselves whether we can meet some or
all of the demands that seemingly are being put to us.
Equally if we are convinced that government is taking
the wrong line, we have got a matter of months to
set about convincing it that it is wrong.
On enquiry, the areas of concern to politicians
are:
• That fixed scales of charges are thought to be pernicious.
• Restrictions on advertising perpetuate an outmoded
way of life.
• Administration of justice behind closed doors
does not satisfy the consumer.
• Codes of conduct fetter competition.
I believe that any professional institution or any
man who tries to attain a totally closed shop purely
on principle would be wrong. I dismiss the closed
shop from my view of today's professional man. It is

elatively easy for me to do so since as surveyors we
have always had competition within and from
without our profession. I suggest it would be more
realistic to require anyone who wishes to discharge
certain quasi-judicial and public functions, such as
arbitrations or valuations, to have passed examinations
acceptable to us, leaving an open question as to
whether he joins the Institution.
Of the four areas of concern to the government,
most of us know full well that generally there is genuine
competition on fees. As I have said earlier, I
fear that in some cases they are too competitive. Our
quantity surveyor members feel keenly that the
retention of recommended scales is important to
them and they argue that it is the complexity of their
work that so dictates. I agree it is helpful that we
should recommend a method of calculation, but I
doubt we can insist on a level of charging.
In all types of surveying practice, the peculiarities
of financing partnerships and the thinness of
surveyors' general management training contribute
to real difficulties in costing individual services and
in bidding for particular jobs. The question of
management training and financial training is
something to which I wish to return later but for the
time being let us concentrate on the remaining accusations
levelled against us by the politicians.
We have nothing to hide in relation to advertising
regulations. I believe that the quality of prestige corporate
advertisements and marketing advertisements
in the real estate profession is quite outstanding.
We do however need to give thought to our
disciplinary procedures. They must not only be
good, but they must be seen to be so. That will I think
inevitably involve the participation of lay members,
primarily in our courts of first instance and then on
any appeal body there maybe. The role of the outside
participant is, I believe, to show to the complainant
that there has been no cover up and that, if guilty, the
party responsible has been punished adequately.
I look forward to receiving the recommendations
of our working party currently studying this area. In
our handling of complaints, whether or not they land
up in a formal disciplinary hearing, there needs to be
a better public acceptance of either the president's
office or that of a third party so that a complainant
can be satisfied that his particular problem has been
looked into in depth and objectively.
It leads me back for the last time, to Professor
Thompson's book: `Men would hesitate to bring in
exorbitant charges or to neglect their duties if liable
to the formal censure of the Institute. Supposing
there to be no other pains or penalties, incompetent
men would think twice before they embarked in proceedings
which might bring them into collision with
their institution.'
NO FEAR OF CENSURE
It is clear from the actions of a few that some
members do not regard the Institution's censure as
being all that worrying. Until such time as the
chartered surveyor has got more widespread acceptance
by the public and by government, and until
there is a better understanding of the duties he
discharges and the qualities he possesses, membership
may indeed well not be worth enough to ensure
that censure, suspension or expulsion will be meaningful
to every member.
255
I do not believe that the remedy lies in greater
teeth. I have severe reservations whether the
membership would accept or whether we could administer
any system of fining. I believe that what we
have got to get is widespread acceptance of the standing
of the Institution being so high as the mere threat
of displeasure is sufficient to keep people in line.
I expect us to be in a position to agree our new
disciplinary systems in a matter of months. If I am
right, the only other area that need concern us in our
discussions with government is whether any of our
by-laws or regulations is a restrictive practice contrary
to the public good. I cannot see anything there
that should concern a reasonable man but it may be
helpful to you to review the key points:
GOVERNMENT AND RULES
The Rules of Conduct are enshrined in 10 subsections
of By-law 24 of which five are either touched
on elsewhere in this paper or are in my eyes uncontroversial.
Some or all of the remaining five subsections
are worthy of discussion:
24(1). `No member shall conduct himself in a
manner unbefitting a chartered surveyor.'
I hope that this is a by-law we will manage to retain.
It smacks of what some may fondly or otherwise
remember as section 69 of the Army Act and it
gives us a measure of flexibility to deal with the unexpected.
24(2). `No member shall be connected with any
occupation or business in any way which is in the opinion
of General Council incompatible with membership
of the Institution.'
I suspect that the Office of Fair Trading may have
reservations about this by-law. Providing General
Council is on record as thinking widely and unoppressively,
it does not seem to me to be an
unreasonable regulation.
24(6). `No member shall
(a) offer or provide whether to a prospective
client or a third party a gift or favour whether in
money or otherwise designed to secure instructions
for work;
(b) quote a fee in competition for professional
services without having received an invitation to do
so and sufficient information to enable the member
to assess the nature and scope of the services required;
(c) having once quoted a fee for professional
services revise that quotation to take account of a fee
quoted by another member of the surveying profession
for the same services;
(d) quote a fee for professional services which
is to be calculated by a reference to the fee quoted or
charged by another member of the surveying profession
reduced by some portion or amount;
(e) pay any fee or commission to a third party
not being a member of the surveying profession for
the introduction of a client or
(f) act or offer to act in any capacity in relation
to any matter which is the subject of judicial or quasi
judicial proceedings either on the footing that no
charge would be made unless the proceedings are
successful or on the footing that the amount of the
charge would be related to the degree of success
attained.'
I suspect that the Office of Fair Trading would

egard part of (b), the whole of (e) and maybe (f) as
being a restrictive practice. They might indeed look
askance at the suggestion in (c) and (e) that we are
protecting the surveying profession but not those
outside the profession who are providing similar
services.
SOLICITATION
24 (7). `No member shall solicit his instructions
for work in any manner whatsoever, provided that
this rule shall not apply in the case of a regular client,
unless the member knew or ought to have known that
the work in question had already been entrusted to
another professional adviser.'
I find the whole subject of solicitation of instructions
something of a farce at the moment and that
farce runs in all divisions virtually to a full house.
Solicitation these days frequently is carried out with
considerable sophistication and finesse. Although the
direct request for instructions by letter is generally all
that is perceived as direct solicitation, if we are honest
with ourselves, there are many equivalents.
I am quite willing to think in terms of the first part
of this by-law disappearing on the grounds that it is
unenforceable. If members were wilfully to abuse
such latitude as any re-drafting might give, I believe
they will ultimately discredit themselves and drive
business away rather than create it.
24(9). `No member shall carry on practice as a
surveyor under any such name, style or title as to prejudice
his professional status or the reputation of the
Institution.'
I suppose such a by-law is to stop the grossest of
excesses although perhaps by-law 24(1) is all that is
needed. What therefore I think we need to be able to
say to the government is:
• that we are at one with them on the concept of
competition but that fee cutting without quality
control is self-defeating;
• that we have a code of professional conduct that
includes public participation at realistic levels;
• that our by-laws and codes of conduct are framed
in order to secure the professional ethic and;
• that our advertising codes promote rather than
prevent competition.
It seems to me to be inevitable that this conversation
is one to have with the government rather than
with the Office of Fair Trading. My confidence of
the OFT has been reduced by the way in which it appears
to be implementing certain provisions of the
Estate Agents Act. It is showing a degree of prejudice
that is unacceptable in public life. For a leading
counsel to- write about the Office of Fair Trading as
follows is remarkable: `I have come to the firm conclusion
that the adjudicating officer's decision in this
case was a perverse one, namely one which no reasonable
person or body of persons properly directing
himself or itself to the relevant issues would make.'
I would leave this area of debate merely by making
the comment that if we are to put our house in
order reasonably, there must be a reasonable person on
the other side.
PROFESSIONAL VOICE
I spoke earlier about the jealousies against the
professions. In so doing I expressed the feeling that
256
some of the jealousy flows from the feeling that the
professions do not contribute to the national wellbeing.
I believe we have a strong defence for our profession
but to mount it we have to develop field leaders
who by their operations and by their standing will
bring the Institution and its membership at large far
more into the public gaze. They must help us achieve
widespread recognition firstly that real estate is not
only one of the scarcest but one of the most valuable
resources in this country. It must have the skilled
management of a chartered surveyor to ensure that it
is properly utilised. We must have chartered
surveyors alongside other leaders in the financial and
business world and in public life ensuring that the
voice of the professional in property is the one that
talks about the land.
The other argument I would put to you is that
chartered surveyors lead a very positive profession
that adds value to the wellbeing financial or otherwise
of those who employ us. Our training gives us
the ability to create value, be that value of either a
fiscal or an environmental nature. Just how many
professions could say the same?
Maybe the public criticism of the professions
stems to an extent from a perception that fees are
paid away without much positive result and that the
professions are protective or administrative rather
than productive. That is certainly a charge that we as
chartered surveyors can dispel and if you look at the
input by surveyors in planning and development, the
construction industry, the aggregate industry,
agriculture and so on, our contribution to the
economy is real.
Perhaps some of our greatest untapped potential
at the moment lies among our quantity surveyor and
building surveyor members who I believe possess the
technical knowledge and skill, if they are so inclined,
to play a far more prominent part in the design
aspects in buildability and in the management
aspects of construction. The overriding thought,
however, that I would leave with you is that above all
professions we are members of one that adds value.
We must not be shy in so saying.
When writing to a member recently, I expressed
the view that as a member I expect the Institution to
achieve three major goals for me:
• Acceptance in the market place at large that the
chartered surveyor is the right person to consult
on any given property matter. That responsibility
includes the promotion and protection of the
good standing of chartered surveyors at large.
• The provision of facilities for continuing professional
studies.
• A meeting place for business and social exchange,
the first of which leads to the creation of opportunity
and to the solution of problems.
There is no doubt that we are a long way down the
line in dealing with the second and third ambitions
although in each case there will always be more to do.
It is in this first area that the Institution needs to
unify its efforts, to consult with other professions
and to make progress.

Social Responsibility for Housing
By Graeme J. Horsley F.N.Z.I. V., M.P.M.I.
President New Zealand Institute of Valuers
This was apaperpresented at the 13th Pan Pacific Congress of Real Estate Appraisers, Valuers and Counselors in
Honolulu, Hawaii, February 10-14 1986.
Reprinted with permission from The American Institute of Real Estate Appraisers and The American Society of Real Estate Counselors,
Chicago, Illinois. No further reproduction is authorised Copyright.
Social Responsibility for Housing
In the context of this address "social responsibility"
is seen as responsibility taken by society as a
whole acting through the institutions of government,
especially central government. These institutions are
themselves created by society and are assumed to be
its agents. Thus social responsibility for housing is
that undertaken by government, at whatever level,
on behalf of the community to assist some or all of its
members to fulfill their housing needs.
The paper covers first a brief history of central
government activity in the housing area in New
Zealand. It then looks at policies with respect to
definable social groups which are deemed to require
special housing assistance. Finally several important
issues related to the topic are presented, to provoke
discussion and comparisons with the situation in
other countries.
A BRIEF HISTORY OF HOUSING POLICY
IN NEW ZEALAND
In New Zealand, central government has accepted
some responsibility to assist with housing since the
end of the nineteenth century. In 1884 the Liberal
Government passed the Government Advances to
Settlers Act, which sanctioned loans to erect
improvements on freehold lands. This was aimed
mainly at rural areas, but was extended to workers in
towns in 1899. It was only in 1905, however, with the
Workers Dwellings Act, that there was an attempt to
target assistance with finance to the lower paid (at
that time those earning under $400 per annum).
Considerable progress came after the First World
War, with the 1915 Discharged Soldiers Settlement
Act, and other measures, including a revision of the
State Advances Act in 1922, so that by 1926 home
ownership had become a reality for 60% of New
Zealand households. This implied a very substantial
shift from tenancy to home ownership over one
generation at the beginning of this century. The
movement was partly political. It was sincerely felt
that home ownership was the basis of self-respect
and a healthy family life, not to mention that a mortgage
debt was a steadying influence. There was also
considerable concern about the influence of poor
housing on health, prompted by epidemics at the
beginning of the century and the post-World War
One world-wide influenza outbreak. It has been suggested
that the comparative lack of violent reaction
in New Zealand during the Great Depression was
partly because a majority of the population felt they
had a stake in the country through property ownership.
257
The Great Depression of 1927 to 1935 was a setback
for housing, as for so many things in New
Zealand, and many people lost their home-owning
status through foreclosure on their mortgages. In
1935 a Labour Government was elected on a platform
of social reform, including the right of every
citizen to health and education services, civic
amenities and decent housing. Local authorities were
instructed to carry out a housing survey, which
showed that 12% of the stock was below minimum
standards and there was a shortage of 20-30,000
housing units. This led to the State Rental Housing
scheme, under which 29,000 houses had been built by
the end of 1949, despite wartime conditions. But
there were still even more applications on the waiting
lists. The state retained ownership of these houses
and let them to tenants according to the merits of
each application. There was no formal income bar.
The quality of state housing in the early period
was extremely good, with generous space standards
inside and out, and careful planning of the surroundings.
It was suggested that government ministers and
their families should have been happy to live in such
dwellings. Post-war increases in population and high
immigration increased pressure on housing, so that
state housing areas became large-scale developments
with less desirable features. They were too large,
lower in quality, lacking in amenities and employment
and, in particular, had too many people of the
same age and income level, including concentrations
of Maoris and Pacific Islanders, newly arrived from
rural areas or overseas.
Lending by the government for house purchase
continued through these years under the State
Advances Corporation of New Zealand, which had
been re-formed in 1936 with the functions of administering
state housing and lending for home purchases.
The period from 1950 to 1971 was one of prosperity
and full employment in New Zealand. It was
also one dominated, apart from a three year term, by
the National Party as government. Their approach
placed the emphasis firmly back on home ownership:
". . an important part of (the government's) policy is
to encourage people to own their homes, for it considers
that home-building and home ownership develops
initiative, self-reliance, thrift and other good qualities
which go to make up the moral strength of the nation
... above all, home ownership permits responsible
citizenship......... "
(1950 White Paper on Housing)

The State Advances Corporation were given
discretion to sell state houses and sections for
building on liberal terms. An upper income limit was
applied for eligibility for state housing, which has
been adjusted over the years. This may have helped to
"target" state assistance and to reduce reliance on the
state, but it also created a stigma attached to state rental
housing, and has led to the segregation of poorer
households in state rental suburbs. As a result of this
two-pronged housing policy (encourage home
ownership and assist the poor and needy) 72,500
state houses had been built by 1971 and about onethird
had been sold.
Fig.1.
Number of
units
near
3,000
2800
2800,
2,400
2,200
2,000
1,800
1,800
1,400
1,200
1,000
800
B00
400
200
ended
31 March
'78
5) C angel in size of ran I hou Ong stock
- ales 2 tens is an acqul ition
-erec urcnae
Sal s to
to nts
Acqusition
'77 '78 '79 '80 '81 '82 '83 '84 '85
(Source: HCNZ)
The year 1971 is significant in housing policy
terms for the report of the Commission of Inquiry
into Housing, which looked widely at the topic and
recommended bringing together the governmental
bodies concerned with housing, the State Advances
Corporation and the Housing Division of the
Ministry of Works (which let contracts for housebuilding
and land development). The 1972-75
Labour Government put into effect many of the
Commission's recommendations but also reduced
the emphasis on sales of state houses and stimulated
the building industry, which experienced a boom
during those years. The National Housing Commission
was established as an advisory body to the
Minister of Housing, and the Housing Corporation
of New Zealand was formed to take over state lending
and state rentals.
In the see-sawing of politics, which will by now be
emerging as predictable, the return of a National
government in 1975 led to a tightening of state
258
Amount
Number $(m)
New houses 3295 (3551) 106.23 (102.66)
Existing houses 6364 (6337) 165.50 (134.96)
Home improvement 2003 (2660) 15.50 (20.09)
Refinance 761 (193) 16.18 (2.51)
Section Loans* 134 (332) 1.65 (3.77)
Building Suspensory
Loans 2227 (2299) 11.14 (11.52)
Home Ownership
Supplemented Loanst - (5363) 24.31 (36.20)
Tenancy Savings
Scheme Loans 1593 (1709) 3.16 (3.83)
Housing for the Elderly 477 (401) 9.07 (7.96)
Rural Housing Loans 52 (61) 6.70 (7.05)
Urban Special Loans 1 (3) 0.02 (0.11)
16.907 (22.909) 359.46 (330.66)
* Loans by the Housing Corporation on sections sold through the Housing
Account.
t Advances charged to subsidy during the year. (Source: HCNZ)
Put another way, this time in the jargon of the
economist, housing is seen as a "merit good", i.e.
something which people should be encouraged to
"consume". It is in the interests of society that
people are adequately housed.

These views justify some government support of
housing, and governments throughout the world
have accepted the responsibility, to a greater or lesser
extent, of assuring at least a minimum standard of
housing for their citizens. Support to housing has
also been seen as a way of redistributing resources.
To some extent this is a proxy for income distribution,
if everyone had sufficient income to house
themselves to an adequate standard then government
assistance would not be needed. But, given that this is
not the case, the state uses housing as part of the
"social wage" approach, whereby services are provided,
free or on a subsidised basis (e.g. Education
and Health).
Additional justification for state assistance in
housing is that it has some responsibility to dependants,
children, old people, the sick and disabled,
and others unable to earn an income. This has
justified special attention to family households, as
we shall see.
There may also be other motives for assistance
beyond the provision of adequate shelter. The
historical survey has shown that an emphasis on
home ownership was intended to encourage the
values of self-sufficiency, stability and independence
and this is part of a deeply ingrained political
philosophy in New Zealand. This same emphasis has
been the rationale for targeting housing assistance to
FIRST HOME BUYERS, as this has the effect of
bringing more people into the home owning
category.
The Housing Corporation, and the State Advances
Corporation before it, have traditionally
loaned money at subsidised rates to first home
buyers, and the same policy has been carried through
into the private sector where first home buyers have
been given priority by building societies and banks,
especially savings banks. This is not on the basis that
this group provides any better risk or better return on
investment than other buyers, in fact more established
borrowers may be a better risk, but because first
home buyers, generally typified as "young couples"
are considered to deserve a special hand to get into
their first home. Of course the stereotype is not
universal. Many people buying for the first time are
single people and, until recently, they have not found
access to housing finance easy, especially single
women, even when they have been able to show that
they gave a good and reliable income. This type of
discrimination has lessened considerably and is now
much less prevalent among private institutions,
although single people are still given lower priority
than couples by the Housing Corporation.
As well as having special eligibility for subsidised
interest housing loans, first home buyers have also
been the recipients of other policy benefits. One was
the First Home Mortgage Interest Tax Rebate, which
allowed all first home buyers a tax rebate for five
years on interest payments up to $1000 per annum.
(Similar policies are in operation in many countries,
including the UK, USA and Australia.) This was a
totally untargeted benefit and, in fact, helped the
better-off most because they were likely to be buying
more expensive homes. This tax rebate is now being
phased out.
To encourage investment in the private sector
(and to assist the building industry to adjust to a
lower level of demand) suspensory loans were introduced
in 1979-80, initially as a one-year measure.
259
First home buyers have access to an interest free
suspensory loan of up to $5,000 if they are building a
first home below a specified cost limit, provided they
obtain mortgage finance from the private sector. The
loan is written off if the original borrower occupies
the property for 7 years.
Home ownership savings schemes give special advantages
to people who save for over two years
towards a house purchase. Benefits provided
through the Post Office and other financial institutions,
e.g. savings banks, are purchase grants and/or
taxation rebates, interest subsidies and supplemented
loans. Although such schemes may be
criticised on the basis that loans are being provided
from small savers to people who may be better off,
this policy is consistent with the principle of helping
those who help themselves and encouraging thrift.
As already noted, the image of the first home buyer
throughout is the "young couple", and these are being
assisted on the basis that they will eventually have
children and form a family household. Thus the real
aim of government policy, as it has been historically, is
houses for families.
This does not, however, recognise the needs of
single people and alternative forms of family, nor
does it take into account that fewer people are having
children, or at least having them later, often at a stage
when they are well established in material and career
terms and in terms of marital stability. It may also
have the effect of helping people who are comparatively
affluent as many young couples with two
incomes now are.
Single people have been treated as a marginal
group in their eligibility for state assistance. Their access
has been determined by the availability of state
funds, the level of competing demand, and pressures
on state expenditure.
FAMILIES WITH CHILDREN have therefore
been a major focus of housing assistance from the
state, both for finance to buy houses and rental housing
provision. The approach is based on the assumptions
that the nuclear family is the best medium for
the upbringing of children, and that government
policy should seek to protect and support this institution
(and not contribute to its undermining, as we
shall see). This is a strong theme throughout social
policy in New Zealand, but may not be consistent
with social trends which are now developing, and a
greater emphasis on individual autonomy. The state
recognises that it should share with parents the cost
of rearing children, and the state makes both direct
and indirect contributions, including universal
family benefits, free education, and preventive
health measures.
Thus, given they are also first home seekers,
families with children are favoured in obtaining subsidised
housing finance from state institutions. Income
limits are raised with each extra child, and the
policy of family benefit capitalisation further assists
home ownership for families.
This policy was introduced in 1958, and was unique
in the world then and probably still is. It enables
the weekly family benefit, which would otherwise be
paid to the principal care-giver (usually the mother),
with respect to each child, to be capitalised as a lump
sum, if approved by the Department of Social Welfare.
The money can be used to assist with purchasing
a home (including an existing home, since 1969)
or making additions or alterations, e.g. adding a

edroom as the family expands. However, capitalisation
reduces the regular income which a benefit
provides to support a child.
When the scheme was first introduced, family
benefit stood at $1.50 per child per week, and the
limit was $2,000, but at that time the average new
house, without land, cost $6,000. Now a family
benefit is $6.00 per week per child, and maximum
capitalisation is $4,000 (regardless of number of
children). As the average house will now cost around
$45,000 this represents under 10% of the purchase
price, as opposed to one-third when the scheme was
initiated. There is also an income limit on capitalisation
of $275.00 per week for a one-child family, and
$25.00 per week for each additional child, and an
assets limit of $20,000. A wife's income has
throughout not been taken into account. The ratio
between the number of children receiving family
benefit and the numbers whose benefits have been
capitalised has been falling in recent years - 1977
8016, 1981 7%, 1985 6% (March years).
For the year ending 31 March 1985 there were
9,448 applications for capitalisation, of which 7,369
were granted. Of these 54% were to purchase an
existing home, 34% to purchase or build a new
home, 6% to purchase from the Crown (state housing),
and 4016 for additions or alterations (Department
of Social Welfare Annual Reports). Many
people suggest that this policy has outlived its usefulness,
because the capitalisation is such a small proportion
of the purchase cost, often not enough for a
deposit, and certainly not enough to bridge the gap
between first mortgage availability and purchase
price which is a major barrier for low-income
families.
Sale
prices
$70,000
$65,000
$60,000
$55,000
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
A
n areas
Half-year
ended '75 '76 '77 '78 '79 '80
December
Houses
Sec(ions
'81 '82 '83 '84
(Source: Valuation Dept)
260
However, not all first home buyers, young
couples, or families with children are eligible for the
special assistance from the Housing Corporation.
Since 1950, as has been shown, there has been an
INCOME BAR for access to state rental housing,
and there is a bar to access to loans from the Housing
Corporation and Maori Affairs Department. These
bodies have traditionally lent at rates of interest
below the market rate, to first home buyers who
qualify on the basis of income. The qualifying limit
has varied from time to time, and is usually about or
a little above the average wage. The 1985 housing
policy package guaranteed housing loans to "modest
income" couples and families on or below the
average wage of $330 per week (joint income basis).
But it introduced a variable subsidy on interest rates
with the lowest rate of 5% and the highest of 15%
(still below prevailing market first mortgage rates)
reached at $430 per week. These limits are raised by
$25.00 per week for each child. Single people are not
eligible. The variable interest scheme will in the interests
of equity be progressively applied to existing
mortgagors to take into account increases in income
since the loan was obtained.
The same housing package increased the loan
limits and made them variable to take into account
the different costs of housing throughout the country,
e.g. highest limits in metropolitan centres. Those
wishing to borrow, however, still have to raise a
deposit equivalent to 12 %2 % of the property's value.
Several other policy measures also assist LOW
INCOME PEOPLE with housing. State rentals are
income-related and access to them is at least partly on
an income basis. Eligibility is determined by Allocation
Committees of lay-people, who assess cases according
to a set of guidelines and allot "points"
which determine waiting list priorities.
For several years social welfare beneficiaries have
been able to receive an accommodation benefit to
compensate for high housing costs, in particular high
private rentals. This benefit covers two-thirds of
weekly rent above a specified level, with a maximum
of $40-$50.00 depending on area. This year the accommodation
benefit has also been made available
to wage earners, recognising that some people cannot
earn enough from full-time work to house
themselves. Income limits for the full benefit are,
however, extremely low, $130.00 weekly for a single
person and $194.00 for a family, gross (pre-tax). An
analysis of recipients of the accommodation benefit
as at March 1985 (beneficiaries only) illustrates the
categories of the "housing poor". Of 43,901 recipients,
50% received Domestic Purposes Benefits
(mainly separated women); 18% received Unemployment
Benefit; 11 % Invalids Benefit; and
11 % National Superannuation. 257 accommodation
benefits have been granted to low income earners in
the first quarter of 1985-86.
The lower income groups in New Zealand society,
which are likely to be targeted for housing assistance
(such as that illustrated above) contain overrepresentation
of certain groups, in particular oneparent
families, Maoris and elderly people.
ONE-PARENT FAMILIES have been shown in
many countries to be disadvantaged in many ways as
against two-parent families, and in particular in their
material standards of living and housing. In New
Zealand, those who have never been home-owners
are eligible for Housing Corporation loans or state
rental housing on the same basis as other low-income

families; Where one-parent households are a result
of marriage breakdown and they have previously
owned a home, then there is some difficulty about
state assistance. The Housing Corporation is sensitive
to any suggestion that they might be facilitating
the break-up of families and are apprehensive that
assistance to separated people will be seen in this
light. Until recently, therefore, there have been rules
against "second eligibility" for housing finance
which have prevented access by previous owners, except
in extreme cases of need, i.e. imminent eviction
of families with young children. This has been on the
basis that the state cannot help anyone more than
once, and on the assumption that people will have
accrued equity from home ownership which will
allow them to rehouse themselves. An interest in an
owned home during the previous period of five years
has also precluded state rental housing for such applicants.
However, it is clear that housing problems
can arise after marital breakdown and these can be
particularly severe in the case of custodial parents
who have only low income from paid work or who
are living on a Social Welfare benefit.
Under New Zealand law (the Matrimonial Property
Act 1977) partners share equally in the
matrimonial home and chattels, but the partner with
care of any children does not receive extra consideration.
This person may either remain in the marital
home and be in the position of attempting to buy out
the share of the partner, plus keeping up mortgage
repayments and home maintenance, or they may be
seeking to rehouse themselves, with or without the
sale of the matrimonial home. When the property is
divided, the share received is often inadequate for repurchase,
and may easily be used up in the costs of
establishing a separate home, e.g. buying a car and
household appliances.
In the last year the government has recognised this
situation and ear-marked funds through the Housing
Corporation for people in "second-chance" situations,
which include a large number of one-parent
families. The demand on these funds has been such
to show that there is a large area of need. It may be
suggested that a welfare beneficiary parent with
small children and little capital is a more deserving
recipient of state housing assistance than a young
couple with no dependants, both of whom are able to
earn an income and save towards home purchase.
State welfare benefits are not lavish and place recipients
in the lowest levels of the income distribution.
The ELDERLY are another group who frequently
have low incomes once they have retired from paid
work, and who are often seen as deserving support
from the rest of society in terms of income
maintenance, housing and other forms of care. In
New Zealand the majority of people aged 65 and
over live in their own housing, only 6% live in institu-
TABLE II
Housing for the elderly Subsidised rental flats built in past 6 years
Rental
Flats Subsidy Loans
Year ended 31 March Completed $(m) $(m)
1980 608 5.47 3.44
1981 387 4.16 3.22
1982 408 2.79 2.79
1983 259 4.18 4.04
1984 367 4.12 5.57
1985 270 3.45 5.79
N.B. Since the start of the scheme in 1950, 13,969 flats have been built.
261
TABLE III
Housing for the elderly Other statistics for the year ended
31 March 1985 (1983-84 in parenthesis)
Owner-occupier (purchase) Flats - Bridging loans were
approved to build 127 flats (69).
Granny Flats Loans were approved for 12 units (6).
Upgrading of Older Pensioner Units Loans of $328,657
($435,600) were approved to assist with the upgrading
of 32 units.
(Source: HCNZ)
tions such as rest homes and hospitals. The majority
are also considered to be living in adequate housing,
suited to their needs in terms of space, access, location
and soon. Those less likely to be suitably housed
are in private rental housing, those living alone and
the very old. One major housing problem is that of
maintaining large family homes when old people are
left alone in them.
People aged 60 and over in New Zealand are
eligible for National Superannuation, which is indexed
to the average wage level. Those who receive
this as their only source of income will come into the
lower income levels and will be eligible for assistance
on the same basis as other state welfare beneficiaries,
accommodation benefits, advances to meet the cost
of repairs and maintenance, and if the elderly people
are seriously disabled they may receive suspensory
loans to assist them to carry out essential alterations
to their homes (this applies to disabled people of any
age).
The state recognises the housing need of the low
income elderly through pensioner housing schemes,
which have existed since 1938. The state handed over
its role as landlord for this group to local authorities
and religious and welfare organisations in 1950. Up
to 1985, 13,956 pensioner flats had been provided,
about 78 o by local authorities (city, borough, county
councils).
Central government makes this possible by the
provision of subsidies and low interest loans for both
sale and rental schemes. The distribution of pensioner
flats throughout the country is uneven as it
depends on local initiative. There is an asset limit
determining access to pensioner flats so that many
people selling a family home would not be eligible.
There has been an expansion of small ownership
housing units in the last 15 years partly in response to
the demand from older couples and widowed people
in this situation. There is some assistance to owneroccupiers
in the form of bridging finance (through
non-profit organisations) and the waiving of stamp
duties when older people move to smaller housing
units.
It is not proposed here to go into the question of
residential homes for the elderly, which is moving
into the health area, except to say that subsidies and
assistance are available where people do not have the
means to support themselves so that the state takes
over a much higher level of responsibility for the
welfare of dependent elderly people than they do for
children.
Although MAORI PEOPLE are found in all
areas of New Zealand life and at all income levels,
they are concentrated in the lower socio-economic
groups and have been shown to be at a disadvantage
in many respects of life, access to education and
employment, life expectation and health standards,
and there is much concern at present to investigate

and rectify these imbalances. There is also a much
lower level of home ownership among Maori households,
46% as opposed to 71016 for non-Maori households.
The proportion of Maori households who
own their homes has in fact declined over the last 20
years, partly as a result of urbanisation and higher
standards of housing.
Maori families are eligible for the full range of
Housing Corporation assistance which has been
described, but in addition special funds are available
through the Maori Affairs Department originally
under the Maori Housing Act (which was extended
to cover Pacific Islanders in 1969). Up to the
mid-1950's most Maori Affairs housing assistance
was in the form of loans to build on Maori owned
land in rural areas. With the increasing urbanisation
of the Maori after World War Two the emphasis
shifted to urban areas and state-owned land. During
the 1960's 1,000 houses a year were being provided.
This fell to about half that rate in the 1970's. In recent
years the department has also been buying existing
houses for resale in a move away from the
grouping of Maori houses, which was considered
socially inappropriate. It is a general question
whether people with the same characteristics,
especially of a noticeably different cultural group,
should be dispersed or grouped in state assisted housing.
There are common interests which suggest
grouping, but also dangers of creating a "ghetto"
atmosphere.
The Maori Affairs Department provides houses
for sale using Housing Corporation guidelines for
size of loans, income eligibility and so on. There are
appropriate features of the loans, however, which include
special guidance and advice. Recently there has
been an emphasis on using scarce resources to help
Maori applicants obtain housing finance from outside
sources, and to help applicants with special
needs. In such circumstances extra funds can be
made available from the Maori Trustee and Maori
Housing Funds, for example there can be difficulties
in raising finance on Maori land which is in multiple
ownership.
It has been questioned recently whether separate
treatment of Maori housing is justified and in April
1984, the corporation was charged with providing
housing loans for low income Maori families formerly
handled by the Department of Maori Affairs,
which would then concentrate its financial assistance
on families which the Housing Corporation is unable
to assist or those with special housing needs. The corporation
is now developing more flexible instruments
for lending to Maori people, including
tribal committees and trusts, for building on
multiple-owned land.
Up to the year ending 31 March 1984 finance had
been provided through the Maori Affairs Department
for 22,634 new houses and 3,866 existing
houses, which is a sizeable proportion of the 27,099
Maori-owned houses. The Department assists only
with house purchase apart from hostel schemes for
young people and "kaumatua" or pensioner flats
for elderly Maori people. These are often built close
to the marae which are the centres of Maori cultural
life. In 1983-84 30 Kaumatua flats were provided
and there were 60 projected for 1984-85.
The Maori Affairs Department has a special interest
in rural housing as many Maoris remain in the
tribal areas, which may have low housing standards
262
and an ageing population. There is some indication
of a drift of maori people back from urban areas,
under the influence of unemployment and following
efforts to mobilise Maori economic resources,
especially land holdings.
Finally there are certain EMERGENCY AND
TRANSITIONAL situations in which people find
themselves which are seen as justifying asistance in
terms of housing need. In these cases housing may be
only one of the forms of assistance required, people
are needed as well to provide counselling, legal advice
and so on. Under the government Emergency
Housing Scheme, the Housing Corporation purchases
properties which are leased to local authorities
at a nominal rent. These authorities allocate the
emergency accommodation either directly or
through voluntary welfare organisations. This
scheme is intended to meet a wide range of need by
people who are desperate for accommodation after
natural disasters, fires, evictions, domestic violence,
etc. The Department of Social Welfare provides a
subsidy to cover operating expenses and also social
workers if available and necessary. The first houses
provided under this scheme opened in 1973, and by
1985 there were 140 emergency houses, concentrated
in the main urban centres Auckland, Wellington,
Christchurch.
Church and voluntary groups had been providing
"shelters" for many years to cater for transients,
homeless people and alcoholics, but pressures in
society by the late 1970's meant that more families
and younger people were finding themselves
homeless.
The late 1970's also saw the growth of the
Women's Refuge movement as a response to
domestic violence. Refuges began as self-help groups
with assistance from local authorities and other
voluntary groups, but have now received state
recognition and support in terms of grants and subsidies
for accommodation and staff, sometimes
through the Emergency Housing scheme.
The state also provides assistance to other groups
with special housing needs of a temporary nature.
These include immigrants (most recently Indo-
Chinese refugees) who receive orientation courses
and are assisted in resettlement with the help of
church and voluntary groups. Through the Department
of Social Welfare schemes have also been set up
to house young transients or "street kids".
ISSUES RELATED TO STATE ASSISTANCE
1. Who needs housing assistance?
As this review has shown, historically new
settlers, farmers and ex-servicemen have been extended
special housing assistance. More recently the
emphasis has shifted to first home buyers and
families with children; and Maori people have been
helped on the same terms, but through their own
department. At present these groups must be in the
lowest income levels to receive assistance, and oneparent
families are helped more on the basis of low
income than social situation. The same is true of the
elderly, who also receive a great deal of other state
assistance. For housing the elderly and also coping
with emergency housing situations, considerable
reliance is placed on the voluntary sector. We should
perhaps examine more closely how groups which are
deemed to deserve assistance are identified, and the
assumptions which underlie this identification,

stimulation of economic development, protection of
those who are vulnerable through age or disability,
egalitarian and redistributive motives.
2. Where does responsibility for housing assistance
lie?
At present in New Zealand, assistance to families
is firmly a central government function, while pensioner
housing lies with local government, and
emergency housing is a voluntary sector initiative
(with some central subsidies). There seem no obvious
reasons for this division of responsibility, it arises
mostly from historical accident. There is a point of
view which suggests that housing and other social
needs are best defined closest to where the need
arises, and the means of meeting the need likewise.
This would suggest some decentralising of responsibility,
which has, in fact, been debated recently.
3. What about accountability to the tax payer?
There have been strong moves recently, from
both sides of the political arena, to target housing
assistance more effectively, so that only those
genuinely in need receive it. These moves include
income-related state rentals and Housing Corporation
interest rates; asset-testing for pensioner housing
and accommodation benefits and limits on state
tenancies. There have also been moral overtones in
how "second chance" applications have been
treated. Local authorities are keenly aware of accountability
to ratepayers and many are also applying
market level criteria to their rental charges. This
situation is obviously influenced by the overall
economic situation, the need to control government
expenditure, and movement towards a "user-pays"
approach.
4. How well are the structures to deliver assistance
working?
Any government agencies must be subject to
political influence, and the historical review has
shown changes in structures and policies with
changes of government. The Housing Corporation
has the potential to become more of a government
department or more of a semi-independent body,
and recent moves have been in the latter direction,
e.g. towards the private sector money market. This
may, however, cut across the welfare functions
263
which are bound up with housing assistance, as has
been shown. Questions about decentralisation and
about the Allocations Committee system are related
issues. There has been some interest recently in
cooperatives and trusts as alternative structures in
the housing area.
5. How can housing assistance be coordinated with
other forms of state support?
Several examples have been given where Housing
Corporation and Department of Social Welfare
policies impinge on each other and require coordination,
Family Benefit Capitalisation, accommodation
benefits, and emergency housing. Different views of
how people should be treated after marriage breakdown
have been hinted at. An efficient and effective
support system can be developed only if the agencies
involved work together and share common values
and objectives.
CONCLUSION
The complex nature of housing in society cannot
be over-estimated. Housing is politically sensitive,
socially significant and economically highly important.
It has multiple functions. Housing, as shelter, is
a basic need, equal to food and warmth. Buying a
house is probably the largest purchase most individuals
or families will make, and their largest
(often sole) capital investment. It is a means of obtaining
psychological as well as financial security.
Through the care and attention they give to their
housing environment, people express their personality
and individuality, and many use housing as a
means of social display and conspicuous consumption
to enhance their prestige and assert their status.
At the macro level, the housing finance market is an
important element in the overall economy and has to
compete with other claims on funds. It is thus open to
manipulation from state and private sources.
Because the house building industry is a major
employer and user of resources, its circumstances
and health are often used as economic indicators.
Thus, given an activity, commodity, social need of
such varied importance, it is no wonder that society
and the government as its agent has sought to control
and regulate access to housing.

Computer Wise
COMPUTERS IN VALUATION PRACTICE A FIRST HAND EXPERIENCE
By E. T. Fitzgerald A.N.Z.I. V., M.N.Z.S.F.M.
Ted Fitzgerald is the principal in the valuation practice Fitzgerald &
Associates Ltd, Timaru. He has a Diploma in Agriculture and
Diploma in Valuation Farm Management from Lincoln as well as
the New Zealand Institute of Valuers Professional Urban
qualifications.
Ted has been involved for longer than most with computer applications
to valuation practice in New Zealand. He is on the
Technology Committee of the Institute, is currently also the
Councillor for South-Canterbury, and is a member of the South
Canterbury Land Valuation Tribunal.
[The author is the principal of Fitzgerald &
Associates Ltd, Timaru, a provincial Rural and
Urban valuation practice with three full time valuers,
and two time sharing office staff. This article reflects
their practical experience of extensive computerisation
revealing its benefits and shortcomings.]
"Tell a man there are three billion stars in the
universe and he will believe you. But tell him there is
wet paint on that bench and he will touch to see".'
And so it is that computers have brought almost a
starlike mystique as to their power and all they can
achieve, and often this illusion is expertly promoted
by computer hardware suppliers. But like all things
which must be made to work effectively they must be
reduced to a level where one can "touch to see".
In 19811 became intrigued by the obvious growing
technology and power evolving from the personal
micro computer. This was fuelled by my good
fortune to be able to share some time on a personal
computer which was made available to me. Over the
ensuing months I developed a good working
knowledge of Visicalc,2 a then widely acclaimed electronic
spread sheet. We then decided to increase
utilisation of this machine and we deployed all of our
word processing to it. During this period we gained
invaluable first hand experience of the real benefits
and pitfalls before we invested in our own first computer
system. Certainly at that time and I think still to
a great extent today, there were very very few people
who really understand the requirements of a valuation
office and understand which applications are
best suited to it. Over that early period we certainly
had to find our own feet.
GETTING STARTED FIRST THINGS FIRST:
By September 1983 we were satisfied that a micro
computer offered sufficient capability to become the
most efficient all encompassing word processing,
264
data storage and information processing system
upon which our practice should concentrate but it
brought with it some required office discipline. Like
many practices ours had continued to substantially
grow, and hitherto our systems had largely evolved in
their own various ways to cope. The time had come
to streamline our way of doing things by means
suited to computer control. At the same time we
recognised that a successful sophisticated system
best evolves from an efficient simple system and in
essence the result we have achieved through computerisation
and the efficiency which has resulted
comes from the computers' speed of handling information
which could not be cost efficiently achieved
by manual systems. It is true that if you cannot
manage your simple manual system a computer will
only speed up your mess.
Our acquisition decisions fell under three areas,
and strictly in the following order:
1. Applications and who will support them.
2. Computer operating systems.
3. Computer hardware.
Many computer salesmen with an enduring persistence
have sold their hardware with every promise
in the world only to disappear when the first
operating crisis occurs. Whether or not new computer
users adopt this decision making sequence will
in the greatest part determine whether or not computerisation
will be fruitful or shatteringly
frustrating.
Applications:
In searching for computer benefits, this area of
decision making is of paramount importance and
should be made from careful evaluation of the practice
areas you wish to computerise and apparently
suitable programs available, without being concerned
by which brand of computer or which

operating system might be promoted. More importantly
with each application it is vital to have a supplier
of each program who can effectively back it up
should trouble shooting be required and it is required
from time to time. From the outset we
established a very good working support relationship
with Systems Software & Instrumentation Ltd,
Christchurch (the writers of Valpak software) and
we still derive continuing benefits as we progressively
upgrade our various applications. I cannot overemphasise
the practical importance of such a relationship.
The initial applications we wished to adopt were
in the areas of word processing, spread sheet applications,
versatile data storage and VALPAK which
was then only under development.
In the event, having chosen the programs which I
will discuss later, we then decided to purchase the
least powerful of the ICL personal computers (ICL
Model 15 Computer with twin floppy disc drives
each 778 kilobyte capacity, with a CPM operating
system coupled with a high speed dedicated correspondence
quality daisy wheel printer (an outlay of
about $11,500 plus about $2,000 for programs). By
mid 1985 our office work load had increased when
we moved to time sharing within our office which required
more than a single keyboard access to our
computer and we then decided to upgrade our system
to a multi user concurrent CPM operating system on
an ICL Model 46 machine capable of running four
separate terminals (we use two) each capable of up to
four simultaneous "virtual" screens and each such
screen capable of controlling an independent program
operating concurrently on the same computer.
We find this an extremely efficient system providing
ready access to all programs and data stored on a 20
megabyte (expandable to 60 megabytes) hard disk.
We have also added a high speed dot Matrix printer
as well as our original daisy wheel (a further total net
outlay of about $16,000 plus a further $2,000 for
program upgrades). I mention this upgrading before
I discuss our applications because this gave us our
first real experience of potential program and data
redundancy when upgrading to a new system of computer
hardware, and was a major factor in the
upgrade course we followed. I mention the outlay we
have made to demonstrate how satisfied we are with
the immense power and benefits the computer has
brought to date, with further much lower cost
enhancements now available to us.
Word Processing:
Word processing has become the computer lingo
for typing. No doubt because the computer brings
with it a powerful set of commands and options
allowing the reprocessing in various ways of typed
format. Indeed word processing accounts for probably
60-70% of the effective computer operating
time in our office. We selected the Wordstar professional
suite of word processing programs in 1983
which is made up of Wordstar, Spellstar, Starindex,
and Mailmerge.3 Wordstar is the central processing
program which enables straightforward typed format
to be printed on screen and stored on disk and
with it the capability to immediately read and call up
pre-typed paragraphs, the rearrangement of any format,
e.g. moving any paragraphs inserting or
deleting words lines paragraphs or major blocks of
text and storing the finished document on disk for
later retrieval upon demand. The Spellstar program
265
is an electronic dictionary of literally thousands of
words which can be user customised and by looking
for word mis-matches it highlights potential spelling
mistakes. Any mis-matched word is simply not in the
dictionary and is assumed to be wrong and can either
be corrected or added to the dictionary for later use.
Spelling checkers are a boon in any valuation office
where reporting excellence is strived for. The
Starindex program enables an electronic index to be
built up identifying particular words or statements
within the text. This later application is useful in a
very length document but we do not use it in day to
day report formats. Mailmerge enables the merging
of lists of names and addresses and salutations into a
standard letter (such as we all receive from magazine
and mail order houses). We have recently purchased
New Word" which is similar to Wordstar but with
some enhancements in our environment.
Although typewriters have become much more
technically advanced, none approaches the storage
and retrieval capacity of a computer without expensive
disk drive add-ons. However if other computer
applications were not likely to be contemplated I am
sure a sophisticated typewriter with some memory
storage would probably prove adequately cost effective
in a small valuation office rather than a fully
lfedged micro computer system. But be warned:
much of the practice benefits from our computer
have arisen from non wordprocessing applications.
Our Wordstar suite of programs was originally
purchased to run on our 8 bit Model 15 Computer
and happily when we upgraded to a 16 bit Model 46
Computer it was able to be quickly upgraded at a cost
of only $100 to run on the more powerful equipment.
Moreover it was able to continue to read all existing
data files and there was absolutely no program or
data redundancy in the word processing area.
Spreadsheets:
A spreadsheet program provides, in effect, an
electronic analysis sheet with each "cell" (i.e.
column/row co-ordinate) capable of being loaded
with numbers, text, or a formula. These spreadsheet
programs are discussed in the N. Z. Valuer Vol.26,
No.4, p.197 by R. V. Hargreaves.
Having originally cut our teeth on the then impressive
Visicalc, by 1983 we selected more advanced
Supercalc 28 which had one or two improved commands
such as the ability to protect cells with permanent
text or formula and the ability to vary column
width facilitating the optimum display of information
on the computer screen and maximising the
number of columns able to be printed in each printer
width.
We have adapted various Supercalc templates
containing preloaded calculation formulae and text
layout for such uses as:
(a) Replacement Insurance Worksheets (example
Table A) which can be used year after year updating
only the variable information and reviewing
the balance data as necessary.
(b) Enterprise Gross Margin Format which can be
readily called up and data varied for different
farming circumstances.
(c) Cash flow profiles.
(d) A whole multiplicity of financial models e.g.
subdivision, investment portfolio schedules, and
the like.
We find our spreadsheet program one of the most

useful applications which can be customised for the
tabulated layout of data and which is capable of
recalculating a result quickly after the input of varied
figures.
In fact our cash flow profiles are designed to
automatically recalculate all opening and closing
data revealing unders and overs against any budget
item without the use of any calculator at all which is a
far cry from the agonising process prior to computerisation.
Specialist Data Storage:
The best known application to Valuers is
"Valpak"' - the Institute developed sales storage
and retrieval management system which is the electronic
version of the microfiche sales distributed to
most practices but with the distinct advantage that all
sales data can be selected or discarded based upon
any field of information e.g. address, sales date, roll
number or any other field shown on the microfiche
headings all within a matter of minutes and without
getting cross eyed. This program is regularly updated
with new sales information on mailed disks much in
the same way as members are updated with the new
microfiche sales information. The new data is electronically
down loaded by the computer itself
(without keying in any data). The Valpak program
enables old sales data to be archived to floppy disks
yet still able to be recalled if required. The Valpak
data maintenance cost (excluding initial program
and computer) amounts to less than $1.00 per instruction
so its time saving cost effectiveness will be
apparent.
We operate between 3,000 and 6,000 sales on our
hard disk sales file before archiving and with this size
file we find it a very efficient system to provide us
with the latest known sales information relative to
each instruction undertaken. The secret of Valpak in
larger metropolitan areas with larger sales files required
is to break down by roll number groupings
and/or between farm, residential and non residential
sales, to more manageable file sizes which are most
likely to provide the range of information suited for
each valuation task. Too large a master sales file increases
the time taken to obtain the desired collection
of data and new users of Valpak should bear this in
mind.
Versatile Data Storage:
In 1983 we acquired the Infostars suite of data
base programs and used this to establish a complete
work file index for our practice which recorded all
dates, reference numbers, client names and
addresses of properties valued. When we upgraded
in 1985 this program proved unable to run on our
upgraded 16 bit concurrent CPM system and we
replaced it with Knowledge Man6 a powerful database
management system capable of being customised
for a whole variety of applications including
the calculation of data as well as its storage. Fortunately
K-Man had a facility able to convert our
Datastar index files to a format able to be read by
K Man and we avoided data redundancy and loss.
We have since extended our work index files on
K Man to provide a permanent computerised record
of our debtors, including a data field for G. S.T., and
by regular updating we will be able to immediately
obtain a print out of all debtors and G.S.T. monthly
data from this work index file without further accounting
programs.
We also developed on K Man a cash payments and
266
receipts analysis system which completely analyses
and stores all transactions (in effect an electronic
cash book) which we extensively use for managing
our own practice finances and also those of a number
of farming clients. The monthly information derived
is used to regularly update cash flow profiles on
Supercalc, and an annual print out provides a complete
transaction analysis for accounting purposes.
Time Cost and Disbursement Recording:
As we progressively computerised we became
more and more aware that a valuation practice sells
nothing more than time and expertise in valuation
packaging. Having steadily become more disciplined
as we evolved to computerisation we decided to keep
a record of our work time spent on each task undertaken.
This was achieved by simply maintaining a
day sheet and the data therefrom entered on a Time
Cost9 program which posts each entry as a transaction
to a transaction file key indexed to each job,
client, and work type performed. All disbursements
are similarly recorded, as are billings and payments
for work done. At any time the program will produce
an up to date report for any job undertaken showing
the amount and details of work/disbursements
chargeable and non chargeable billings to date and
payments to date and a balance outstanding. Additionally
it produces a print out of all jobs with this information
in summary form or alternatively a staff
member could select only those jobs for which he is
responsible. A systems report gives a one page summary
of the totals chargeable and non chargeable
work in disbursements, uncharged work in progress,
billings, payments and unpaid debtors along with
period work type reports disbursement type reports
and staff reports if required.
This Time Cost program provides us with an accurate
and efficient time and disbursement costing
system for every job undertaken and measures our
real practice efficiency against charges made for
various work undertaken. As a bonus it also provides
us with a summary debtors system coupled to our
work costing. This program is undoubtedly the most
powerful business application on our computer.
Valuation Applications:
It will be noted so far that the greatest computer
applications we have developed are in the areas of
report word processing (a major component) and
that of practice administration. To date there is a
paucity of worthwhile valuation programs available
in New Zealand and we have tended to develop our
own specialist applications using general purpose
programs such as Supercalc 2 and Knowledgeman
when we have repeat applications. We do run the
Kellogg Internal Rate of Return program when required,
and it is a major forward step when running
discounted cash flows or establishing variations to
their NPV's at differing rates.
A range of useful farm consultancy programs are
variously produced, but so far we have found that we
can achieve a sufficient benefit from our Knowledgeman/Supercalc
combination of programs without
further program investment. To date we have not yet
incorporated full accounting programs (Debtors,
Creditors, General Ledger, etc.), although this
would be a next easy step.
Computer Operating Systems:
Having decided which program applications to
pursue, the computer operating system is the next
decision. Which is the best operating system is pro-

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ably the most hotly argued matter in the computer
world. Each user's best system is that which will run
the program applications selected. Having achieved
that, which is best, fastest, most compatible, or likely
to become the industry standard, is relatively immaterial
to get up and running. However we would
be inclined to stick with CP/M, concurrent CP/M or
MS-dos operating systems. Our concurrent CP/M86
has a premode utility enabling it to run MS-dos programs
- a useful feature. Most operating systems
come packaged with the computer you will select,
and once the operating system is selected you will
then finally decide which computer you might purchase.
Although our own experience has been with
the ICL range of equipment which we have found
satisfactory, there are other brands of equipment
which could be equally satisfactory so long as they
are fully supported. However, when selecting a computer,
keep in mind that at some point you will
almost certainly want to expand your system and require
upgraded capacity, and your decisions should
always keep your options open. Our own first major
investment into computers in 1983 kept us satisfied
for 20 months before we undertook our first major
upgrade.
When selecting your printer for any computer,
remember that by far the greatest time involved inputting
data to a computer, (be it Word Processing
or any other application), is at the keyboard, and the
end result is not usually printed to hard copy until
that inputting phase is completed. It is therefore important
to procure the highest speed quality printer
you can since in practice the dumping of data from
the computer to hard copy becomes a tail-end operation
and it is most frustrating to wait while a slow
speed typewriter-type printer (12-18 characters per
second) slowly produces your hard copy. We run a 50-
60 characters per second dedicated Daisy Wheel
printer for correspondence type, and a 200
characters per second Dot Matrix printer for draft
and in-office hard copies, and we regard these printer
capacities as a desirable minimum.
Looking Back:
Just as the financially programmed pocket
calculator has brought a seemingly brilliant advance
in technology to the aid of valuers, the computer in
turn has brought an even greater potential benefit, if
properly channelled, to help a valuation practice
through the 1980's and into the 1990's. In itself,
without practice dedication it will not overnight solve
any practice ills. Our beginnings began with some
fascination in the mystery of computers, and over the
last 4 or 5 years the pendulum has swung at various
time from disenchantment to ecstasy as we encountered
and overcame problems respectively.
They present new challenges and it is necessary to
build new confidence steadily. To be too hasty or impatient
is likely to encourage revolution in the ranks
instead of evolution to a more efficient and productive
system. Remember too that your staff who will
have to operate the equipment will also have to
develop some new and different skills, and they too
268
need time to develop new confidence. There is undoubtedly
a learning curve to consider if computers
are to take their effective place in an office. By the
same token, if we have learnt anybody can learn.
Our experience to date endorses that the benefits are
well worth the cost.
Summary Do's and Don'ts
DO consider carefully the areas of your practice
you wish to computerise - think generally without
too much specific detail for a start.
DO assign computer development within your
practice to a small team (not everyone) but a will to
communicate is essential. Seek and use the help of
software support firms for expert program knowledge
- but you will have to determine the results
you want to achieve.
Do at least speak with other program users as to
how a particular program might practically achieve
its purpose in your office.
Do make sure that each program you buy has
available support backup.
DO give your staff time to master each program
application, one at a time.
DO think expansively you sooner or later will
want to expand or upgrade your system.
DO make your decisions in the order of (1) Software
Programs and support, (2) Operating Systems,
(3) Hardware strictly in that order decide in any
other order at your peril!
DON'T let computer hardware salesmen determine
the best programs for your applications. Software
applications and support are a specialist area.
DON'T overlook software and hardware after
sales support. It is a vital backup.
DON'T be miserable when selecting printer
equipment - go for speed and reliable quality.
DON'T expect your staff to master everything the
moment the computer comes out of its box. Gradual
confidence builds its own will to expand computer
applications.
Don't be Afraid:
[The author would be happy to assist any reader in
any practical aspect of valuation office computerisation
by phoning (Person to Person), Timaru 47-066.]
ACKNOWLEDGEMENTS:
1. Murphy's Law on Technology.
2. VisiCalc Tm. VisiCorp USA.
3. Wordstar, Spellstar, Starindex, Mailmerge Tm. Micropro
International, California, USA.
4. NewWord Tm. Newstar Software, California, USA.
5. Infostar, Datastar, Reportstar - Tm. Micropro International,
California, USA.
6. Knowledgeman - Tm. Micro Data Base Systems, Indiana,
USA.
7. Valpak - Tm. NZIV Services Ltd - Written by SSI Ltd,
Christchurch.
8. Supercalc2 Tm. Sorcim Corporation, California, USA.
9. Timecost - Tm. - Written by SSI Ltd, Christchurch.
10. CP/M and CCP/M are trademarks of Digital Research,
USA.
11. MS-DOS is a trademark of Microsoft Corporation.

Certificate of Valuation
for Insurance Purposes
ESTIMATED REINSTATEMENT COST WITH INFLATION
By Allan Pankhurst A.N. Z.I. Q. S.
Allan Pankhurst has 28 years experience in Quantity Surveying in
New Zealand, United Kingdom, Australia and Pacific Islands on most
types of buildings and structures. He also has had experience in settling
insurance claims and valuation work.
Allan is a Senior Partner in the national practice of Knapman
Clark & Co. - Quantity Surveyors, advising many building/
property owners including Government Departments, Producer
Boards, Public Companies and other Institutions.
He is the current Chairman Wellington Branch of the N.Z. Institute
of Quantity Surveyors, and a member of a number of committees of
the national N.Z.I.Q.S., such as Rules Committee (Convenor),
Finance Committee and Institute representative to the Earthquake
and War Damage Commission.
One of the items a Certifying Valuer is confronted
with when completing a Certificate of Valuation for
insurance purposes to a building owner, is an
estimated amount of inflation to provide cover for
reinstatement of the building in the event of the
existing building being destroyed beyond the point of
repair.
This article outlines the matters and possible
events such Certifying Valuers must reflect upon
when addressing this particular item with particular
respect to inner city high rise buildings.
The inflationary provision for reinstatement on
the printed forms of Certificate of Valuation for insurance
purposes usually reads as follows:
"The estimated amount of inflation anticipated during
both the period of insurance and the estimated reinstatement
period taking into consideration time required
for damage inspections, demolition, preparation
of new preliminary proposals and their approval,
preparation of working drawings and specifications,
schedule of quantities, obtaining City Council ap-
reasonable case rather than best reasonable case. Let
us look at the type of some matters and possible
events which must be considered.
1.00 The period of insurance:
1.01 A full year of inflation must be allowed for;
assuming the building is destroyed by an insured peril
on the. last day of the insurance period.
2.00 The period required for inspections, demolitions,
new plans and tenders:
2.01 It must be assumed that the building is
totally destroyed by an insured peril on the last day of
the insurance period. Time is then needed to inspect
the damaged property, determine whether repairs
are the appropriate remedy on the one hand or
demolition of debris and total reinstatement of the
damaged (destroyed) property is required on the
other hand.
2.02 The Certifying Valuer should not overlook
the possibility of it being necessary to reappraise the
design of the destroyed building in order to confirm
that it still complies with Town Planning require-
proval, tenders, etc. is ... $ " ments and also assess the impact of other structures
As can be seen from the above description, three
`time' components can be broadly identified. They
are:
(1) THE PERIOD OF INSURANCE.
(2) THE PERIOD REQUIRED FOR INSPEC-
TIONS, DEMOLITIONS, NEW PLANS AND
TENDERS.
(3) THE PERIOD REQUIRED FOR REIN-
STATEMENT CONSTRUCTION.
When considering the factors which may have an
impact on this estimated reinstatement cost valuation
one is faced with having to take the view of worst
269
or buildings having been erected (or be in the course
of erection) on any adjoining or nearby sites.
2.03 If the building is a total loss, it is quite possible
that injury or death of persons may have occurred
and, accordingly, inquiry may be called for by
the Authorities, which inquiry may delay demolition
and removal of debris.
2.04 Also it may be that the damaged (existing)
building has been fractured and represents a potential
danger to adjoining properties. The damaged
building may need immediate temporary stabilising
measures to be put in place before any demolition
could be undertaken.

2.05 If the damaged (destroyed) building were on
a central city site the Insured would carefully
evaluate the alternatives of rebuilding on such a
prime site or alternatively seek to purchase another
similar building in the immediate area to replace that
destroyed. However, such alternative premises may
not be available on a regular basis. Even the procurement
of temporary premises for all displaced tenants
of the destroyed building would be a problem in
itself. (Provision of such temporary premises is not
included for in the standard Certificate of
Valuation.)
2.06 Furthermore, the existing foundations and
piles may be suspected to have been fractured or
become unsound during the advent of the peril. They
may require test loading to satisfy the building owner
that the existing foundations that are still in the
ground are sound.
2.07 Contemporaneously, with the investigation
per 2.06 above, the building owner would have to
consider the consequences to the time programme if
such investigations were to discover the existing piles to
be unsound. A foundation system to work around the
existing piles may have to be devised.
2.08 Also, it is not uncommon for engineering
regulations to be changed and amended so that
design concepts of the building as it stands are no
longer valid practice for such "improved" engineering
regulations. Such revised engineering regulations
may not necessarily cost more (indeed they may cost
less) but the concepts of for instance where and how
reinforcing steel is placed and the manner in which the
structure is designed to perform during an earthquake
may call for a total redesign in accordance
with then engineering regulations. It will probably
not be possible to pluck the `as-built' drawings of the
existing (damaged) building out of the bottom
drawer and say "Here, rebuild this!"
2.09 The building owner has to arrange for plans,
specifications and schedules of quantities (or such
other tender documentation as is warranted by the
circumstances) to be prepared so that tenders can be
invited from building contractors, for erection of a
new (reinstating) building.
2.10 In all this, prudent commercial practices
should not be abandoned and the rebuilding exercise
embarked upon once proper documented arrangements
are in place.
2.11 During the time period for processing of all the
foregoing it would probably not be unreasonable to
anticipate that demolition and clearing of the site could
be undertaken.
2.12 The Certifying Valuer must consider all
270
these matters and assess a reasonable and realistic
time period accordingly.
3.00 The period required for reinstatement construction:
3.01 Assuming that all approvals are obtained
and the damaged building has been demolished, a
tender (or offer) from a building contractor could be
accepted by the building owner for a new replacement
building to be built to completion ready for use
by occupants.
3.02 An assessment must be made of the
reasonable time period required for actual reinstatement
construction. Such period must allow for contractual
grounds for extensions of time sought by and
allowed to building contractors during construction.
Conclusion:
Thus the Certifying Valuer must carefully assess
the period of time required for each of the three
headings to arrive at a total overall time frame from
commencement of insurance period up to completion
of a new (reinstating) building, on the assumption
that the insured building is destroyed (damaged)
beyond repair by an insured peril.
To the total time frame, the Certifying Valuer
must then apply an estimated provision for inflation;
noting that during the construction period (item No.
3) the provision for inflation must be discounted by
the progress payments that normally would be made
to the building contractor during the course of construction.
Over the last 15 years, the average compounding
rate of inflation has been something in the order of
12% p.a. There have, however, within that 15 year
period been cycles where the inflation rate has peaked
around 20% p.a. and, conversely, times when it
has been below 12% p.a. Accordingly when looking
at projected future inflation for the purposes of insurance
protection, the Certifying Valuer must be
prudent and once again provide for worst reasonable
case.
A final point to note is that if a Valuation is based
on competitive construction costs at time of doing
the Valuation, it should not be overlooked that the
volume of construction work in the market place
may be very high at any time in the future, with consequential
strain on available resources. There have
been times in the recent history of this country where
premium in price has had to be paid in order to attract
scarce resources to construction work.
This article was first published in `Quantity Surveying' The
Official Journal of The New Zealand Institute of Quantity
Surveyors (Inc.).

New Developments in Feasibility Studies
for Property Management
By P. M. Brown A.N.Z.I. V., M.P.M.I.
Peter Brown is a senior lecturer, National University of Singapore, a
post he has held since 1981, after terminating his position as
senior lecturer in Valuation, Auckland University. His
qualifications include, a Roseworthy Diploma of Agriculture
(South Australia), Diploma of Valuation and Farm Management,
Lincoln College, Bachelor of Economics, and Master of Philosophy.
He is a Fellow of the Australian Institute of Valuers and a member of
the Singapore Institute of Surveyors and Valuers.
1. INTRODUCTION:
The analysis process of evaluating a series of alternative
possibilities for the use of a resource of land or an
existing building, is often referred to as a feasibility study.
The process consists of four parts:
1. the identification of the problem,
2. an analysis of the market potential of possible
uses for possible projects,
3. the financial analysis of the possible projects and
finally
4. the evaluation and decision making process.
Project management is a narrower view of a
specific individual property, rather than portfolio
management which deals with many investments, or
property management which is the specific day to
day administration of an existing improvement.
Therefore the topic presumes a specific site capable
of an alternative higher and better use, with the
desire to find which is the optimal feasible solution,
with the associated probable financial outcomes for
each strategy. As such the feasibility study, is an aid
for the decision making process.
2. IDENTIFICATION:
The optimal feasible solution required by the investor
may be unique or a common global level of
possibility suitable for many investors. A specific investor
may consider the profitability as the only
criteria of evaluation of a project, whereas some may
be limited by possible funds available either by equity
or through borrowing; some may consider the length
of the investment and the associated risk involved for
each strategy; whilst others may consider only the
marginal costing of a project to ensure the continued
survival of the firm or work team. In addition the investor
may already own the land and is considering
only the opportunity cost of development, whereas
to others it may be the purchase of the land at current
market prices, or at a premium, at the commencement
of the whole project. As such the strategy likely
to be employed will vary between investors and it is
271
necessary for the feasibility study to take account of
these objectives to allow the correct evaluation of the
possible financial outcomes.
The identification process has to consider the
legal, physical and locational attributes of the
specific site at the present and in the reasonably
foreseeable future. In this way consideration has to
be given to the zoning and planning allowances for
the site as it exists or through modification and payment
of the associated Development Charge. The
specific site benefits from physical characteristics
which will influence the final cost. A site requiring
substantive piling, clearing, or even suffering from a
high water table will be more costly to develop than a
lfat, cleared, free drained one. The soil itself will
determine the load bearing capability for such a project
thus influencing the cost of such possible ventures.
It has often been said the main determinant of
value is location, but this presumes the highest and
best use of such a site, which in turn presumes a current
demand for these uses. Therefore location will
generally determine the possible uses of the site. Such
contemplated uses may not be realisable at the present
time so a feasibility study may have to consider
the opportunity cost of holding the site until the
market demand improves. Location implies accessibility
for the finished product, so the term of the
development project must be considered, especially
with the development of new accessibility through
the Mass Rapid Transport system being constructed
in Singapore.
3. MARKET POTENTIAL:
From the identified possible uses of the site an
evaluation of the potential market demand has to be
undertaken. This requires data on the occupancy
rate, take-up rate, probable market rental or selling
prices, costs of development and maintenance of
possible strategies for the site. The current expected
over production of apartments, and offices gives a
poorer prospect of success of these projects, but the
analyst must be clairvoyant to be able to determine

the future market positions, at the time of completion
and during its lifetime. The risk of uncertainty
can be reduced through extensive analysis of historic
data and forecasting to the future, but even these expert
predictions are liable to error, therefore one
must consider the probability of a range of possible
outcomes.
A compatibility use matrix may be developed as
part of the market potential for a site with weightings
being evaluated either through positive/negative, or
effect values or favourable/not favourable classes.'
The overall highest aggregate weighting is selected as
the most feasible use of such a site. Alternatively an
initial financial and risk analysis may be undertaken to
justify the static break-even point for possible
market uses.'
These approaches provide a guide of the static
market potential of the site.
4. FINANCIAL ANALYSIS:
Development is a dynamic process influenced by
changing market conditions of costs and incomes.
The historic comparable sale approach to valuation
presumes past conditions will continue uninterrupted
to the future. Often adjustments are necessary
to the historic data in order to compare with the
current project, but the degree of these adjustments
has found many valuers not fully informed.3 Therefore
the static hypothetical development process
became an approved method of valuation. In this
way the potential income of the site when developed
to its logical highest and best use, less the costs of
development, realisation and opportunity costs of
development, lead to what one could afford to pay
for the site as a method of valuation. Again this is
subject to a static approach being based on historic
evidence and presumes a market for the final product
with a predetermined level of costs. It does not consider
the possible over development of the market
during the gestation period with the associated
reduced income for the site.
The final evaluation procedure incorporates the
feasibility study to determine the possible outcome
of the strategy proposed. In this way, historic
evidence can be dynamically modified for varying
situations and based upon the individual's goals.
Thus it may incorporate the owner's financial
criteria and expectations. Therefore it becomes a
personal evaluation of the potential of the site, and is
not accepted by the Courts. The dynamic approach
will allow input and output variables to be modified
so that the risk of the venture can be ascertained. Until
recently this approach has been hindered by the extensive
range of variables to be considered in a project,
with the wide range of possible values for each
variable.
The use of computers has reduced the time of
calculations of individual outcomes when the
variables values are changed. In this way the price
paid for the land, expected construction costs, size of
the apartments, sales (or rental) rate and price can be
varied either individually or jointly within a computer
programme. The output can then be evaluated
in the light of past performances and expectations of
the future. This is known as sensitivity analysis.
To this time consuming approach has been added
the Monte Carlo simulation technique, which facilitates
risk analysis. Statistics of multiple solutions are
collected using randomly generated values, so it is an
272
appropriate method when it is either impossible or
inadequate to assign a single point value for certain
variables. One needs to define selected model
variables in terms of a probability distribution range,
then the Monte Carlo simulation procedure solves
the model a number of times on different randomly
generated values within the distribution. The process
summarises the outcomes allowing probability statements
to be made on the overall results. The variables
are defined as either state variables which are uncertain
and do not realistically have one point estimate
of expected value, or control variables which can be
predicted or have little influence on the overall performance
of the project. This overcomes point
estimates of the individual outcomes, the worst
possible outcome, most optimistic outcome or the intuitive
guess outcome. A Monte Carlo simulation
will indicate the actual level of risk involved which
can be evaluated by the decision makers.
5. THE EVALUATION AND DECISION
MAKING:
There are many criteria to evaluate the cash flow
of a project. Traditionally one has experienced the
net present value model, the internal rate of return or
the payback approach. The net present value approach
converts all income flows and outflows over
the project's life at a predetermined discount rate to a
lump sum present value. The time of the expenditures
is costed at the discount rate and the expected
income flow is discounted through the time cost of
money. If the resultant evaluation is positive the project
can be undertaken and the predetermined interest
rate is achieved. This presupposes that the discount
rate can be predetermined.
The second measure is the internal rate of return
where the expected income flows are equated to the
outflows over the time horizon of each flow. Therefore
the flows are equated to a present value basis.
Generally the investment is accepted if the internal
rate of return is greater than the cost of capital
available for the development or if greater than alternative
strategies. Thus one can evaluate the margin
of risk for the entrepreneur as being the surplus
beyond the cost of capital. The greater the expected
risk then the higher the expected internal rate of
return to cover the entrepreneur's outlay of capital.
Some problems may be encountered in
calculating the internal rate of return of:
1. the possibility of multiple rates of return which
allows the cash flow to balance,
2. the position of lender or borrower of funds,
3. the possibility of mutually exclusive projects,
4. the re-investment rate of surplus inflow being different
to the internal rate of return,
5. the short term as against the long term cost of
capital and
6. the period when the funds flow i.e. the commencement,
equally distributed or at the end of
the period.
Therefore adjustments may need to be undertaken in
the evaluation of this performance measure.
Projects may also be evaluated on the pay back
method where the net income flows are used as a
criterion against the capital outlay of the project. In
this way the shorter the payback period, usually expressed
in a number of years, the quicker the recoupment
of the investment. Many public works are
evaluated by this criterion. A longer payback period

is subject to greater exposure to uncertainty through
changing consumer tastes, hence the expected income
flow may not be realised.
A more recent evaluation criterion is the profitability
index. It is calculated by the division of the
present value of the income flows by the present
value of the costs. This becomes a ratio in present
value terms of the funds flow of the project. If the
resultant ratio is greater than unity then the investment
is worthwhile, as the income is greater than the
outflow.
6 AN EXAMPLE
A hypothetical example can be used to demonstrate
some of the points covered. In this case a site of
8,211 square metres zoned for residential use with a
density allowance of 200 persons per hectare is considered.
Current construction costs are presumed at
$800 per square metre for a unit of 120 square metre
in size in a low rise condominium development. A
total of 41 units can be constructed on the site and the
expected selling price is $300,000. Commissions and
selling expenses of 3 % have to be deducted from the
selling price. Initial expectations show that the project
requires three years for completion and the sales
are likely to commence in the sixth quarter (three
units), increase to four, then to eight for the next two
quarters, and then nine for the next two periods. This
is a total selling period of six quarters but income is
dependent upon the Housing Developers (Amend-
ment) Rules of 1981. Other expenses of professional
fees, progress payments, property tax, legal fees and
planning fees follow from these assumptions.
The project is evaluated by the net present value,
internal rate of return and the profitability index.
The discount rate is assumed to be 14%.
This information presumes the identification process
- land area, legal, physical and locational advantages
of the site; the market potential determines
the most likely use to be of low rise condominiums,
with the associated costs of development and financial
expectations.
The financial analysis starts with a static cash flow
model as shown in Appendix One. The cash flow is
on a quarterly basis over the three year period. The
initial model shows the investment is worthwhile as
the net present value (NPV) is positive ($476,170)
when the money flows are discounted at 14% per annum.
Therefore if the cost of funds for such a project
is 14% then a surplus of $476,170 is acquired by the
developer. The internal rate of return (ROR) is
17.67% showing that the income flow is greater than
the outflow and the venture is thus feasible. In addition
the profitability index (PI) is positive showing
the discounted income exceeds the expenses by 6%.
This initial result is modified through a sensitivity
analysis where changes in the unit area, price, construction
costs, land selling price and selling program
are changed.
Benefit from the experience
This book is available from the:
REAL ESTATE VALUATION
REPORTS AND APPRAISALS
Editor
Dr R. T. M. Whipple
New Zealand Institute of Valuers
Westbrook House, 181-183 Willis Street, Wellington
Ph. 847-094
With its chapters on the proper preparation of reports
and appraisals, and its inclusion of demonstration
reports, this book is an indispensable reference for
students, practising valuers and the users of their
services. Eminently practical guidance is provided for
clients to select and instruct valuers and real estate
consultants to ensure their requirements are met.
1984 xvii, 155 pp
0455 204 004 softcover
C The Law Book Company Limited
273
$NZ 25 p. & P. inc .

The results are summarised below:
TABLEI
Sensitivity Analysis
NPV ROR PI
Initial 476170 .1767 1.058
1. Land Price - original $500 per square metre
400 1326008 .2556 1.181
450 901089 .2136 1.117
525 263710 .1598 1.032
550 51250 .1437 1.006
600 - 373669 .1141 .958
650 - 798588 .0872 .915
2. Construction Cost original $800 per square metre
720 863041 .2074 1.111
760 669605 .1919 1.084
840 282734 .1616 1.034
880 89298 .1468 1.010
3. Unit Area original 120 square metres
110 798562 .2022 1.102
115 637366 .1894 1.080
125 314973 .1641 1.038
130 153777 .1517 1.018
4. Selling Price original $300,000
255000 -819061 .0739 .899
270000 -387318 .1092 .952
285000 44426 .1435 1.005
315000 907913 .2089 1.111
330000 1339657 .2403 1.164
345000 1771400 .2708 1.217
5. Selling program
Initial 0 for 5,3,4,8,8,9,9
O for 6 7,8,8,9,9,0 453027 .1747 1.056
quicker
G for 7 7,8,8,9,9 274513 .1594 1.034
slower
O for 6 3,4,8,8,9,9 284458 .1602 1.035
slower
In this table the net present value becomes
negative when the internal rate of returns drops
below 14%, the discount rate. The variations from
the initial presumptions have been stepped at positive
and negative 5% and 10% intervals to indicate the
likely variance on the outcome. This becomes a sensitivity
analysis, showing that a 10% change in the initial
assumptions has the greatest influence on the
profitability by the selling price, unit area, construction
cost and finally the land price. Therefore the
selling price in this model is the most critical for the
success of the project. A slower selling program still
indicates a profit can be achieved, but the question is
"how slow?".
So far the feasibility study has only looked at a
general solution, not considering the specific objectives
of the individual. The financial position of the
individual must be considered before the developer
can ensure the successful completion of the project.
A hypothetical case of $4,000,000 equity contribution
is considered with the balance being provided by
an interim loan bearing interest at 15% per annum.
Through the effect of gearing, the rate of return increases
from the initial model of 17.67% to 37.8%.
Thus the model now considers the individual's position
as a personal evaluation of the feasibility of the
project.
The Monte Carlo simulation process on the initial
model produces a series of probability levels for the
evaluation of the results. In this case the state
variables are construction costs, land price and selling
price. These are allowed to vary over a likely
274
range of values generated by a random number
distribution. The results are summarised below:
TABLE II
Monte Carlo simulation of financial data
NPV ROR PI
Probability of $'000's
value being
greater than
indicated
90 -514143 .101 .939
80 - 293695 .118 .966
70 -134737 .130 .985
60 1085 .140 1.001
50 128038 .150 1.016
40 254991 .159 1.031
30 390814 .170 1.048
20 549772 .182 1.067
10 770219 .198 1.093
mean 128038 .150 1.016
This table shows that the probability of a profit of
greater than 14% is 60%, it might go to a low of
10.1% (but the probability is remote) or to a high of
19.8 % but this is also a remote possibility. The mean
net present value return is likely to be $128038 with
the mean expected rate of return 14.97%, just over
the discount rate. This leads the profitability index to
be just over unity by 1.6%. Therefore the mean expected
evaluation criteria show the project to be
worthwhile.
7. CONCLUSION:
With the advent of computer programmes more
extensive analysis can be undertaken of feasibility
analysis of project evaluation, with greater level of
confidence. The tedium of massive calculations can
be overcome so that the specific management task of a
project may be faced with a greater level of certainty.
The programming requirements are simple to ensure
the optimal personal solution can be achieved
for the evaluation of the project.
REFERENCES:
1. See for instance T. V. Grisson "A feasibility process: The
benefits of Land Economics and Risk Management", TheAppraisal
Journal, July, 1984 pp.366-68.
2. Ibid., pp.368-74.
3. There are many court case precedents where valuers have proved
to be insufficiently forewarned of probable outcomes e.g.
Corisands Investments Ltd v Duce & Co (1978) E.G. v 248
pp.315, 407 and 504; Singer & Friedlander Ltd v John D.
Wood & Co [1977] E.G. 569.

APPENDIX ONE
Initial Cash Flow 1 2 3 4 5 6
Land Area 8211 0 0 0 0 0
Units 41 41 41 41 41 41
Land Price 500 0 0 0 0 0
Construction Cost 800 800 800 800 800 800
Unit Area 120 120 120 120 120 120
Commission .0300 .0300 .0300 .0300 .0300 .0300
Selling Price 300000 300000 300000 300000 300000 300000
Building Cost 4329600 4329600 4329600 4329600 4329600 4329600
Progress Payment 0 0 0 .0750 .1100 .1400
Profession Fee .0080 .0120 .0067 .0067 .0067 .0067
Selling Income
Selling Program 0 0 0 0 0 .0293
Sales Income 0 0 0 0 0 360390
Inflow 0 0 0 0 0 349578
Development Costs
Legal Expenses 145017 0 0 0 0 0
Land Cost 4105500 0 0 0 0 0
Planning Fees 1158 0 0 0 0 0
Property Tax 7475 0 7475 0 7475 0
Progress Payments 0 0 0 324720 476256 606144
Professional Fees 34637 51955 28878 28878 28878 28878
Outflow 4293787 51955 36353 353598 512609 635022
Net Cash Flow - 4293787 -51955 - 36353 - 353598 - 512609 - 285444
Discount Rate .1400 .1400 .1400 .1400 .1400 .1400
NPV - 4293787 -4344068 - 4378116 - 4698619 - 5148276 - 5400160
ROR
PI 0 0 0 0 0 .0505
Initial Cash Flow 7 8 9 10 11 12
Land Area 0 0 0 0 0 0
Units 41 41 41 41 41 41
Land Price 0 0 0 0 0 0
Construction Cost 800 800 800 800 800 800
Unit Area 120 120 120 120 120 120
Commission .0300 .0300 .0300 .0300 .0300 .0300
Selling Price 300000 300000 300000 300000 300000 300000
Building Cost 4329600 4329600 4329600 4329600 4329600 4329600
Progress Payment .3250 .1800 .1700 0 0 0
Profession Fee .0067 .0067 .0080 .0120 0 0
Selling Income
Selling Program .0476 .1076 .1256 .2378 .3536 .1000
Sales Income 585480 1323480 1544880 2924940 4349280 1230000
Inflow 567916 1283776 1498534 2837192 4218802 1193100
Development Costs
Legal Expenses 0 0 0 0 0 0
land Cost 0 0 0 0 0 0
Planning Fees 0 0 0 0 0 0
Property Tax 7475 0 7475 0 7475 0
Progress Payments 1407120 779328 736032 0 0 0
Professional Fees 28878 28878 34637 51955 0 0
Outflow 1443473 808206 778144 51955 7475 0
Net Cash Flow -875558 475569 720390 2785237 4211327 1193100
Discount Rate .1400 .1400 .1400 .1400 .1400 .1400
NPV -6134525 - 5789299 -5272142 -3266145 - 329139 476170
ROR .1131 .1767
PI .1075 .2297 .3503 .5994 .9597 1.058
275

SENSITIVITY ANALYSIS FOR FEASIBILITY STUDY
276

Legal Decisions
CASES RECEIVED
Notice of cases received are given for members' information. They will be printed in the "Valuer" as space permits and normally in date
sequence.
Elwyn Mickell and Julie Anne Mickell, Appellants and Waimairi District Council Respondent and Fendalton Service Station Applicant,
Appeal before the Planning Tribunal Decision No. W.30/85.
Cases `noted' will not normally be published in the "Valuer".
CASES NOTED
Copies of cases `received' and `noted' may be obtained from the Registrar of the Court under whose jurisdiction the cases were heard.
(A charge is normally made for photocopying.)
THE VALUERS' REGISTRATION BOARD
IN THE MATTER of an Inquiry pursuant to Section
32(2) of the Valuers Act 1948
AND
IN THE MATTER OF charges under Section
31 (1) (c) of the Valuers Act 1948 against STEPHEN
G. MIHALJEVICH.
DECISION OF THE BOARD OF INQUIRY OF THE
VALUERS' REGISTRATION BOARD.
Members of the Board of Inquiry:
P. E. TIERNEY (Chairman), D. J. ARMSTRONG, M. R.
HANNA and R. P. YOUNG.
Counsel:
MRS M. S. HINDE for the Valuer General.
MR K. F. GOULD for Mr Mihaljevich.
DATES OF HEARING: 10 & 11 June 1985.
DATE OF DECISION: 14 August 1985.
This inquiry arose from a complaint lodged by Mr R. J. Rowe
of Kohimarama with The New Zealand Institute of Valuers on
10 August 1984, expanded on 27 August 1984 and subsequently
passed by the Institute to the Valuers' Registration Board.
Mr Mihaljevich had on 11 July 1984 completed a valuation for
mortgage purposes on a 10.4859 hectare property at Clevedon for
Driver, Wadsworth, Kyd and Ray. Solicitors acting for a Mr P.
Rixon, Mr Mihaljevich valued the property at $275,000 with a
mortgage recommendation of a maximum of $137,500. It was
alleged by Mr Rowe that the valuation was "grossly excessive" and
had been presented by the then owner of the land to prospective
purchasers. The complaint went onto specify several areas of
complaint in support of this contention.
In terms of 32(1) of the Valuers Act 1948 this complaint was investigated
by the Valuer General and his report dated 6 November
1984 duly came before the Board. After consideration the Board
decided that in terms of Section 32(2) of that Act an Inquiry should
be held. By Notice dated 19 December 1984 Mr Mihaljevich was
advised of the Board's intention and of the charges against him. A
hearing date was set down which was twice deferred at the request
of the Defence Counsel until this Inquiry was convened on 10 July
1985. The charges laid against Mr Mihaljevich were:
1. Section 31(1)(c) of the Valuers Act 1948: That you have
been guilty of such incompetent conduct in the performance of
your duties as a valuer as renders you unfit to be registered under
the Valuers Act 1948 in that in compiling a valuation report dated
11 July 1984 in respect of a property of 10.4859 hectares at North
Road, Clevedon for the purpose of making a mortgage recommendation
you failed to take proper or any account of the following
matters:
1. Flooding and drainage problems with the property;
2. The lack of domestic water supply to the property.
2. Section 31(1) of the Valuers Act 1948: That you have been
guilty of such incompetent conduct in the performance of your
duties as a valuer as renders you unfit to be registered under the
Valuers Act 1948 in that in compiling a valuation report dated 11
July 1984 in respect of a property of 10.4859 hectares at North
Road, Clevedon for the purpose of making a mortgage recommendation
you made a mortgage recommendation that was excessive.
3. Section 31(1)(c) of the Valuers Act 1948: That you have
277
been guilty of such incompetent conduct in the performance of
your duties as a valuer as renders you unfit to be registered under
the Valuers Act 1948 in that in compiling a valuation report dated 11
July 1984 in respect of a property of 10.4859 hectares at North
Road, Clevedon for the purpose of making a mortgage recommendation
you grossly over valued the property.
When formally charged at the Inquiry, Mr Mihaljevich denied
the three charges.
The Board heard evidence from the Valuer General, Mr J. M.
Kingstone, Registered Valuer; Mr T. R. Gay, Registered Valuer;
Mr R. S. Robins, Registered Surveyor and City Surveyor for the
Manukau City Council; Mr P. H. D. Edwards, Consulting
Engineer; and from Mr Mihaljevich.
The evidence produced to the Inquiry leaves the Board in no
doubt as to the value of the property at the relevant date of 10 July
1984. The following series of events in chronological order
disclose.
14/10/81 Transfer to Colin Gower $78,000
1/ 7/82 Government Valuation C.V. $78,000
17/ 4/84 Valuation by J. M. Kingstone C.V.$110,000
10/ 7/84 Valuation by S. G. Mihaljevich C. V.$275,000
10/ 7/84 Valuation by T. R. Gay C.V.$115,000
10/ 9/84 Transfer to P. K. T. Rixon $110,000
28/ 2/85 Transfer to K. C. Morgan $110,000
The Board does not propose to deal with the evidence in detail.
It accepts the opinions of Mr Kingstone who valued the property
prior to the relevant date and Mr Gay who made his assessment
shortly afterwards but without the knowledge of the contents of
the two previous valuations, that the correct market valuation of
10 July 1984 lay between $110,000 and $115,000. Both these
witnesses are Registered Valuers whose local knowledge and professionalism
are to be commended. Both were aware of the potential
for flooding on this property and commented on this in their
reports. Both in the Board's opinion drew the correct conclusions
from the sales evidence available.
Mr Kingstone whose valuation of April171984 had been made
as a normal assignment in the day to day course of his practice, had
made a detailed inspection of all the sales he quoted in his report
and was in the Board's opinion substantially unshaken by a
searching but fair cross examination by Mr Gould. This cross examination
highlighted the necessity to inspect carefully and to be
aware of all circumstances surrounding sales quoted in support of
valuations.
Mr Mihaljevich conceded during his evidence in chief that his
valuation in July 1984 was excessive and that with his current
knowledge he would value it today at $140,000. Even this assessment,
$135,000 less than his original valuation, is unacceptable by
the Board in the light of his admissions both to his own Counsel and
in cross examination as to his lack of experience in this locality.
How Mr Mihaljevich came to make this huge over assessment
became clear from his own evidence and from his Counsel's submissions.
It is a classic example of a Valuer undertaking work for
which he had neither training, experience nor knowledge and is an
object lesson to any Valuer undertaking work outside his competence.
Mr Mihaljevich holds a Diploma in Urban Valuation and his
entire training, both in the Valuation Department and in public
practice, was devoted to urban style work. Four months after he
had commenced work in public practice he was requested to make a
valuation of this rural property and despite his own misgivings
agreed to undertake the assignment. It was, Mr Mihaljevich
testified, his first rural valuation in this locality.
As part of his valuation research he made enquiries at the
Manukau Office of the Valuation Department where he received
an indication that some of the Wairoa River area of Clevedon wac

prone to flooding although the Department's records did not
specify this property. In pursuing investigations about flooding
Mr Mihaljevich attended the Manukau City Town Planning
Department where according to his sworn testimony he was informed
"that whilst the land had flooded some years beforehand the
Council was to upgrade various drainage facilities in the general area
which would alleviate the likelihood of flooding in the future". He
proceeded to complete his valuation without any further investigation
into this vital matter, or it appears, without giving the matter
any substantial further thought. Certainly his report which made no
reference to flooding or to the information obtained from the
Manukau City Council was couched in rather glowing terms. It is
clear that because of his lack of training and experience in rural
work, he was unable to draw the correct conclusions or at least see
the warning signs that this property could flood. These signs were
quite apparent to Mr Kingstone and Mr Gay.
The Board received extensive evidence from Mr P. H. D. Edwards
a Consulting Civil Engineer and a senior partner in Babbage
Partners Ltd, Architects and Engineers and from Mr R. S. Robins
a Registered Surveyor for the Manakau City Council. Their
evidence, supplemented by some excellent photographs taken or
gathered by Mr Gay and Mr Mihaljevich, proved conclusively that
the property flooded extensively to a considerable depth but for
relatively short periods of time. This sequence is due to the strong
tidal component of the Wairoa River at this point.
One can sympathise with Mr Mihaljevich insofar as neither the
Valuation Department's records nor the Town Planning Department
of the Manukau City Council were able to directly inform
him that this particular property flooded. Nevertheless his investigations
were extremely scanty and he cannot rely on those investigations
as an excuse for overlooking this vital factor.
Of lesser importance than the flooding was the question of
drainage. Both Mr Kingstone and Mr Gay mentioned in their
reports the wet nature of the property in adverse conditions and
the small area in swampy growth, while Mr Mihaljevich made no
mention of either condition.
Mr Mihaljevich admitted that he had incorrectly described the
water supply source.
The Board believes that any Valuer competent to undertake a
valuation of this property would not have made the errors and
omissions made by Mr Mihaljevich.
2',8
The Board finds Mr Mihaijevich guilty of incompetent conduct
with respect to charge No.1.
While the major reason for the gross over valuation of the pro-
perty was unquestionably the lack of knowledge about thel
f
ooding and restricted drainage to which the property was subject
and the market response to these conditions, there were additional
technical shortcomings in the analysis of comparable sales that
compounded the error. Mr Mihaljevich regarded Clevedon, a
small rural township which the property adjoined, as the centre or
focal point of the entire district so that properties more distant
from Clevedon would, all other things being equal, in his view be
of lesser value than the subject property. This simplistic approach
ignored significant overlapping influences from other centres,
some larger than Clevedon and in one analysis a mistaken
classification of that property's zoning, led to another incorrect
assumption.
Each of these shortcomings was quite significant in leading Mr
Mihaljevich to the wrong conclusion and amounts in the Board's
opinion, to incompetent conduct.
The Board finds Stephen G. Mihaljevich guilty of incompetent
conduct in terms of charges No.2 and No.3.
The Board accepts Mr Gould's submissions that the latter two
charges are linked charges.
In considering the penalties that should be imposed the Board is
conscious of the serious nature of the charges but has given heed to
Mr Gould's plea on behalf of his client. Mr Mihaljevich was
frank in admitting that he should not have undertaken this type of
valuation and would not do so again. It is Mr Mihaljevich's first
offence under the Valuers Act.
For these reasons the Board will not impose a penalty of
deregistration but will impose a monetary penalty.
In accordance with the powers vested in it the Board
reprimands Stephen G. Mihaljevich as to Charge No.1 and fines
him the sum of ONE THOUSAND DOLLARS ($1000).
As to Charge 2 the Board reprimands Stephen G. Mihaljevich.
As to Charge 3 the Board reprimands Stephen G. Mihaljevich
and fines him the sum of FIVE HUNDRED DOLLARS ($500).

NORTHLAND
COUTTS MILBURN & ASSOCIATES
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
89 Cameron Street, Whangarei.
P.O. Box 223, Whangarei.
Phone (089) 484-367, 484-655.
W. A. F. Burgess, Dip.V.F.M., A.N.Z.I.V.
C. S. COUttS, A.N.Z.I.V., F.R.E.I.N.Z.
G. T. Hanlon, v.P.u., A.N.Z.I.V.
I. D. Baker, v.P.u., A.N.Z.I.V.
ROBISONS
REGISTERED VALUERS
P.O. Box 1093, Whangarei.
Phone (089) 88-443, 89-599.
G. J. Bacon, Dip.V.F.M., A.N.Z.I.V.
J. F. Hudson, v.P.U., A.N.Z.I.V.
A. C. Nicholls, Dip.V.F.M., A.N.Z.I.V., M.N.Z.S.F.M.
T. S. Baker, V.P.U., A.N.Z.I.V.
R. L. Hutchison, Dip.Urb.Val.
G. S. Algie, Dip.Urb.Val., A.N.Z.I.V.
MOIR ASSOCIATES
REGISTERED VALUERS
Kerikeri House, Kerikeri.
P.O. Box 254, Kerikeri.
Phone 78-500.
G. H. Moir, Dip.Urb.Val., A.N.Z.I.V.
S. R. McNally, B.Ag.Sci., A.N.Z.I.V.
AUCKLAND
ABBOTT, CARLTON, LAWTON & CO. -
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
225 Great South Rd, Greenlane, Auckland.
P.O. Box 17-063. Greenlane.
Phone (09) 548-061, 541-522.
Waiheke Island Office. Phone (0972) 7718.
W. J. Carlton, Dip.Ag., Dip.V.F.M., A.N.Z.I.V.
R. D. Lawton, Dip.Urb.Val.(Hons), A.N.Z.I.V.
R. McG. Swan, Dip.Urb.Val., A.N.Z.I.V.
S. R. Marshall, Dip.Urb.Val.(Hons), A.N.Z.I.V.
S. H. Abbott, A.N.Z.I.V., F. R. E.LN.Z.(Consultant)
BARFOOT & THOMPSON LTD
REGISTERED VALUERS
Cnr Fort and Commerce Streets, Auckland.
P.O. Box 4078, Auckland.
Phone (09) 794-460.
T. L. Esplin, Dip.Urb.Val., A.N.Z.I.V.
R. J. Pheasant, Dip.Urb.Val., A.N.Z.I.V.
S. I. Jecks, Dip.Urb.Val., A.N.Z.I.V.
LLOYD W. BARKER & ASSOCIATES
REGISTERED VALUERS
Westpac Plaza, Moana Avenue.
P.O. Box 15, Orewa.
Phone (0942) 65-062, 64-194.
L. W. Barker, Dip.Urb.Val., A.N.Z.I.V.
M. P. Morse, B.Ag.Com., A.N.Z.I.V.
Professional Directory
279
BARRATT-BOYES, JEFFERIES, LAING &
PARTNERS-
REGISTERED VALUERS
4th floor, Quay Tower, 29 Customs Street, Auckland.
P.O. Box 6193, Wellesley Street, Auckland.
Phone (09) 773-045, 797-782.
D. B. C. Barratt-Boyes, B.A.(Hons), F.N.Z.LV.
R. L. Jefferies, Dip.Urb.Val., B.C.A., F.N.Z.I.V., M.P.M.I.
R. W. Laing, A.N.Z.I.V., A.R.E.I.N.Z.
M. A. Norton, Dip.Urb.Val.(Hons), A.N.Z.I.V.
C. F. BENNETT (VALUATIONS) LTD
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
9th Floor, Countrywide Centre, 280 Queen St.. Auckland.
P.O. Box 5000, Auckland 1.
Phone (09) 799-591.
R. M. McGough, Dip.Urb.Val., F.N.Z.I.V., M.P.M.I.
A. G. Hilton, M.D.A., A.N.Z.I.V.
C. N. Chamberlain, Dip.V.F.M., Dip.Ag., A.I.V., A.N.Z.I.V.
L. V. Brake, A.N.Z.I.V.
M. J. G. Steur, Dip.Val., A.N.Z.I.V.
D. E. BOWER & ASSOCIATES
REGISTERED VALUERS, PROPERTY
MANAGERS, PROPERTY AND INVESTMENT
CONSULTANTS
134 Parnell Road, Auckland.
P.O. Box 37622, Parnell, Auckland.
Phone (09) 390-130.
David E. Bower, Dip.Urb.Val., A.N.Z.I.V., A.R.E.I.N.Z.,
M.P.M.I., A.N.Z.I.M.
MICHAEL T. CANNIN
REGISTERED VALUER AND PROPERTY
CONSULTANT
1 Herbert Street, Takapuna.
Phone (09) 498-517.
M. T. Cannin, A.N.Z.I.V., A.C.I.S.
DARROCH MARSH & CO. -
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
2 King Street, Pukekohe.
P.O. Box 89, Pukekohe.
Phone (085) 86-276.
W. R. Marsh, A.N.Z.I.V., Dip.V.F.M., M.P.M.I.
M. J. Irwin, A.N.Z.I.V., B.Ag.
W. G. Priest, A.N.Z.I.V., B.Ag., M.N.Z.A.F.M.
DARROCH SIMPSON & CO
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
Cnr Shea Terrace and Taharoto Rd, Takapuna,
Auckland 9.
P.O. Box 33-227, Takapuna, Auckland 9.
Phone (09) 491-677.
N. K. Darroch, F.N.Z.I.V., Dip.V.F.M., Val.Prof.Urb.,
M.P.M.I., A.C.I.Arb.
S. B. Molloy, A.N.Z.I.V., Dip.Urb.Val.
E. B. Smithies, A.N.Z.I.V.
A. J. Wiltshire, A.N.Z.I.V., Dip.Urb.Val.
R. I. Forsyth, A.N.Z.I.V., Dip.Urb.Val.
C. C. Barraclough, A.N.Z.I.V., B.Comm.
A. J. Plume, A.N.Z.I.V., Dip.Val.
W. D. Godkin, A.N.Z.I.V.
W. W. Kerr, A.N.Z.I.V., Dip.V.F.M.
R. D. Baker, A.N.Z.I.V.
R. A. Bell, A.N.Z.I.V., F.R.I.C.S., Dip.Surv., Dip.Urb.Val.,
A.R.E.I.N.Z., F.P.M.I.

EYLES, PURDY & CO. -
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
3rd Floor, Greer's Building,
Cnr High Street and Vulcan Lane, Auckland 1.
P.O. Box 2729, Auckland. DX7.
Phone (09) 34-972.
Russell Eyles, V.P.Urb., A.N.Z.I.V.
Richard A. Purdy, V.P.Urb., A.N.Z.I.V.
John W. Charters, V.P.(Urb. & Rural), A.N.Z.I.V.
S. Nigel Dean, Dip.Urb.Val., A.N.Z.I.V.
Professional Directory
GUY, STEVENSON, PETHERBRIDGE
PROPERTY CONSULTANTS AND REGISTERED
VALUERS
21 East Street, Papakura. P.O. Box 452, Papakura.
Phone (09) 299-7406, 299-6152.
2nd Floor, 3 Osterley Way, Manukau City.
P.O. Box 76-081, Manukau City.
Phone (09) 277-9529.
A. D. Guy, Val.Prof.Rural, A.N.Z.I.V.
K. G. Stevenson, Dip.V.F.M., Val.Prof.Urb., A.N.Z.I.V.
P. D. Petherbridge, M.N.Z.I.S., Dip.Urb.Val., A.N.Z.I.V.
HARCOURTS EDWARD RUSHTON
REGISTERED VALUERS
DFC Building, 350 Queen Street, Auckland.
P.O. Box 5872, Auckland.
Phone (09) 398-414.
Telex NZ 60825.
M. T. Sprague, A.N.Z.I.V.
M. J. Robertson, Dip.Urb.Val., Dip.V.F.M.
HOLLIS & SCHOLEFIELD
REGISTERED VALUERS, FARM
MANAGEMENT CONSULTANTS
Queen Street, Warkworth.
P.O. Box 165, Warkworth.
Phone (0846) 8810.
Station Road, Wellsford.
P.O. Box 121, Wellsford.
Phone (0846) 38068.
R. G. Hollis, Dip.V.F.M., M.N.Z.S.F.M., A.N.Z.I.V.
G. W. H. Scholefield, Dip.V.F.M., A.N.Z.I.V.
JENSEN, DAVIES & CO. -
REGISTERED PUBLIC VALUERS
328 Remuera Road, Remuera.
P.O. Box 28-344, Remuera, Auckland 5.
Phone (09) 545-992, 502-729, 504-700.
Rex H. Jensen, Dip.Urb.Val., A.N.Z.I.V.
Alan J. Davies, Dip.Urb.Val., A.N.Z.I.V.
Jack L. Langstone, V.P.Urb., A.N.Z.I.V.
Dana A. McAuliffe, V.P.Urb., A.N.Z.I.V.
David R. Jans, Dip.Urb.Val., A.N.Z.I.V.
Bruce W. Somerville, Dip.Urb.Val., A.N.Z.I.V.,
A.R.E.I.N.Z., M.P.M.I.
280
MAHONEY, YOUNG & GAMBY
REGISTERED VALUERS, PROPERTY
CONSULTANTS AND PROPERTY MANAGERS
7th Floor, DFC House,
Cnf 350 Queen and Rutland Streets, Auckland.
P.O. Box 5533, Auckland.
Phone (09) 734-990, 492-139.
Peter J. Mahoney, Dip.Urb.Val., F.N.Z.I.V., M.P.M.I.
R. Peter Young, B.Com., Dip.Urb.Val., F.N.Z.I.V., M.P.M.I.
M. Evan Gamby, Dip.Urb.Val., A.N.Z.I.V., M.P.M.I.
Bruce A. Cork, Dip.Urb.Val., A.N.Z.I.V.
David H. Baker, F.N.Z.I.V.
James D. Gudgin, Dip.Urb.Val., A.N.Z.I.V.
Ross H. Hendry, Dip.Urb.Val., A.N.Z.I.V.
Trevor M. Walker, Dip.Val.
Geoff S. Quiaffe, B.Ag.Comm., Dip.V.F.M.
Mary-Jo Patterson, B.Comm.(V.P.M.).
JOHN F. McELHINNEY
REGISTERED VALUER, REGISTERED FARM
MANAGEMENT CONSULTANT
P.O. Box 12, Albany, Auckland.
Phone (09) 774-969.
John F. McElhinney, Dip.Ag., Dip.V.F.M., A.N.Z.I.V.,
M.N.Z.S.F.M.
MARTIN SYMES & CO. -
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
Level 1, 450 Queen Street, Auckland.
P.O. Box 3707, Auckland.
Phone (09) 792-176, 792-198.
Michael X. Martin, A.N.Z.I.V., A.R.E.I.N.Z.
David N. Symes, Dip.Urb.Val., A.N.Z.I.V.
D. A. (Tony) Culav, Dip.Urb.Val., A.N.Z.I.V.
Ian M. Gunn, A.N.Z.I.V., A.R.E.I.N.Z.
PLATT AMESBURY & CO. -
REGISTERED VALUERS
238 Broadway, Newmarket, Auckland 1.
P.O. Box 9195, Newmarket, Auckland 1.
Phone (09) 542-390, 502-873.
Phil D. Platt, A.N.Z.I.V., Dip.V.F.M., A.R.E.I.N.Z.
Phillip R. Amesbury, Dip.Urb.Val., A.N.Z.I.V.
Eileen Fong, Dip.Urb.Val., A.N.Z.I.V.
Michael A. Webster, A.N.Z.I.V., A.R.E.I.N.Z.
ROLLE ASSOCIATES LTD
VALUERS, PROPERTY MANAGERS
466 Manukau Road, Epsom, Auckland.
P.O. Box 26213, Epsom, Auckland.
Phone (09) 688-111.
M. L. Svensen, Registered Valuer, F. R. E. 1. N. Z., M.P.M.I.,
A.Inst.Arb., F.N.Z.I.V.
L. S. Harwood, Dip.Va1.
SHELDON & ASSOCIATES -
REGISTERED VALUERS
GRE Building, Ground Floor, 12-14 Northcroft St,
Takapuna.
P.O. Box 33-136, Takapuna.
Phone (09) 494-310, 493-934, 496-130.
R. M. H. Sheldon, A.N.Z.I.V., N.Z.T.C.
A. S. McEwan, A.N.Z.I.V., Dip.Urb.Val.
B. R. Stafford-Bush, B.Sc., Dip.B.I.A., A.R.E.I.N.Z.
J. B. Rhodes, A.N.Z.I.V.

C. N. SEAGAR & ASSOCIATES
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
137 Kolmar Road, Papatoetoe.
P.O. Box 23-724, Hunters Corner.
Phone (09) 278-6909, 278-7258.
22 Picton Street, Howick.
P.O. Box 38-051, Howick.
Phone (09) 535-4540, 535-5206.
C. N. Seagar, Dip.Urb.Val., A.N.Z.I.V., M.P.M.I.
J. M. Kingston, Dip.Urb.Val., Dip.V.P.M., A.N.Z.I.V.
M. A. Clark, Dip.Val., A.N.Z.I.V.
A. J. Gillard, Dip.Urb.Val., A.N.Z.I.V.
A. A. Appleton, Dip.Urb.Val., A.N.Z.I.V.
I. R. McGowan, B.Com.(V.P.M.).
STACE BENNETT LTD
REGISTERED VALUER AND PROPERTY
CONSULTANT
97 Shortland Street, Auckland 1.
P.O. Box 1530, Auckland 1.
Phone (09) 33-484.
R. S. Gardner, F.N.Z.I.V., A.R.E.I.N.Z.
R. A. Fraser, A.N.Z.I.V., A.R.E.I.N.Z.
A. R. Gardner, A.N.Z.I.V.
WAIKATO
ARCHBOLD & CO. -
REGISTERED VALUERS AND PROPERTY
MANAGEMENT CONSULTANTS
12 Knox Street, Hamilton.
P.O. Box 9381, Hamilton.
Phone (071) 390-155.
D. J. O. Archbold, J.P., A.N.Z.I.V., M.P.M.I., Dip.V.F.M.
G. W. Tizard, A.N.Z.I.V., A.C.I.Arb., B.Agr.Comm.
M. J. JORDAN & ASSOCIATES
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
207 Mary Street, Thames.
P.O. Box 500, Thames.
Phone (0843) 88-963.
M. J. Jordan, A.N.Z.I.V., Val.Prof.Rural, Val.Prof.Urb.
J. L. Glenn, B.Agr.Comm., A.N.Z.I.V.
McKEGG & DYMOCK
REGISTERED PUBLIC VALUERS
P.O. Box 9560, Hamilton.
Phone (071) 299-829, 81-653.
Hamisk M. McKegg, A.N.Z.I.V., Dip.V.F.M.,
Val.Prof.Urban.
Wynne F. Dymock, A.N.Z.I.V., Val.Prof.Rural, Dip.Ag.
J. R. SHARP
REGISTERED VALUER
12 Garthwood Road, Hamilton. P.O.
Box 11-065, Hillcrest, Hamilton. Phone
(071) 63-656.
J. R. Sharp, A.N.Z.I.V., Dip.V.F.M., M.N.Z.S.F.M.
RONALD J. SIMPSON LTD
FARM CONSULTANTS, SUPERVISORS,
VALUERS
7 Alexandra Street, Te Awamutu.
P.O. Box 220, Te Awamutu.
Phone (082) 3176.
R. J. Simpson, Dip.V.F.M., A.N.Z.1.V., M.N.Z.S.F.M.
Professional Directory
281
SPORLE, BERNAU & ASSOCIATES
REGISTERED VALUERS, PROPERTY
CONSULTANTS
Federated Farmers Building, 169 London Street,
Hamilton.
P.O. Box 442, Hamilton.
Phone (071) 80-164.
P. D. Sporle, Dip.V.F.M., A.N.Z.I.V., M.N.Z.S.F.M.
T. J. Bernau, Dip.Mac., Dip.V.F.M., F.N.Z.I.V.,
M.N.Z.S.F.M.
L. W. Hawken, Dip.V.F.M., Val.Prof.Urb., A.N.Z.I.V.
ROTORUA/BAY OF PLENTY
C.B. MORRISON
(INCORPORATING G. F. COLBECK
& ASSOCIATES)
REGISTERED VALUER, AND PROPERTY
DEVELOPMENT ADVISER
107 Heu Heu Street, Taupo.
P.O. Box 1277, Taupo.
Phone (074) 85-533.
C. B. Morrison, B.E.(Civil), M.I.P.E.N.Z., M.I.C.E.,
A.N.Z.I.V.
GROOTHUIS, STEWART, MIDDLETON
& PRATT
REGISTERED VALUERS, URBAN AND RURAL
PROPERTY CONSULTANTS
18 Wharf Street, Tauranga.
P.O. Box 455, Tauranga.
Phone (075) 84-675, 81-942.
Maunganui Road, Mt Maunganui.
Phone (075) 56-386.
Jellicoe Street, Te Puke.
Phone (075) 38-220.
H. J. Groothuis, A.N.Z.I.V., M.P.M.I.
H. K. F. Stewart, A.N.Z.I.V., M.P.M.I., A.C.I.Arb.
J. L. Middleton, B.Agr.Sc., A.N.Z.I.V., M.N.Z.I.A.S.
A. H. Pratt, A.N.Z.I.V., M.P.M.I.
J. G. Burke, B.Agr.Sc., A.N.Z.I.V., M.N.Z.S.F.M. (Associate).
JONES, TIERNEY & GREEN
PUBLIC VALUERS AND PROPERTY
CONSULTANTS
Appraisal House, 36 Cameron Road, Tauranga.
P.O. Box 295, Tauranga.
Phone (075) 81-648, 81-794.
Peter E. Tierney, Dip.V.F.M., F.N.Z.I.V.
Leonard T. Green, Dip.Urb.Val., A.N.Z.I.V.
J. Douglas Voss, Dip.V.F.M., A.N.Z.I.V.
T. Jarvie Smith, A.R.I.B.A., A.N.Z.I.V., A.N.Z.I.A.
Brett R. Watson, Dip.Urb.Val., A.N.Z.I.V.
Murray R. Mander, Dip.V.F.M., F.N.Z.I.V.
David F. Boyd, Dip.V.F.M., A.N.Z.I.V.
McDOWELL & CO. -
REGISTERED VALUERS
90 Eruera Street, Rotorua.
P.O. Box 1134, Rotorua.
Phone (073) 84-159.
I. G. McDowell, Dip.U.V., A.N.Z.I.V., A.R.E.I.N.Z.,
M.P.M.I.

REID & REYNOLDS
REGISTERED VALUERS
13 Amohia Street, Rotorua.
P.O. Box 2121, Rotorua.
Phone (073) 81-059.
Ronald H. Reid, A.N.Z.I.V.
Hugh H. Reynolds, A.N.Z.I.V.
GISBORNE
BALL & CRAWSHAW
REGISTERED VALUERS, PROPERTY
CONSULTANTS
60 Peel Street, Gisborne.
P.O. Box 60, Gisborne.
Phone (079) 79-679.
R. R. Kelly, A.N.Z.I.V.
LEWIS & WRIGHT
ASSOCIATES IN RURAL AND URBAN
VALUATION, FARM SUPERVISION,
CONSULTANCY, ECONOMIC SURVEYS
57 Customhouse Street, Gisborne.
P.O. Box 2038, Gisborne.
Phone (079) 82-562.
Professional
T. D. Lewis, B.Ag.Sc., Registered Farm Management
Consultant.
P. B. Wright, Dip.V.F.M., Registered Valuer and Farm
Management Consultant.
G. H. Kelso, Dip.V.F.M., Registered Valuer.
HAWKE'S BAY
FARRELL & BEACHAM
REGISTERED VALUERS
Russell Street N., Hastings.
Phone (070) 84-166.
John Paul Farrell, F.N.Z.V.I.
Patrick Percy Beacham, A.N.Z.I.V.
GLYN M. JONES
REGISTERED PUBLIC VALUER
102 Thompson Road, Napier.
P.O. Box 39, Taradale, Napier.
Phone (070) 58-873 Napier.
Glyn M. Jones, Dip.Ag., Dip.V.F.M., A.N.Z.I.V.,
M.N.Z.S.F.M., M.N.Z.A.S.C.
MORICE, WATSON & ASSOCIATES
REGISTERED VALUERS & FARM
MANAGEMENT CONSULTANTS
6 Station Street, Napier.
P.O. Box 320, Napier.
Phone (070) 53-682, 57-415.
S. D. Morice, Dip.V.F.M., A.N.Z.I.V., M.N.Z.S.F.M.
N. L. Watson, Dip.V.F.M., A.N.Z.I.V., M.N.Z.S.F.M.
W. A. Nurse, B.Ag.Com., A.N.Z.I.V., M.N.Z.S.F.M.
RAWCLIFFE & PLESTED
REGISTERED PUBLIC VALUERS
20 Raffles Street, Napier.
P.O. Box 572, Napier.
Phone (070) 56-179.
T. Rawcliffe, F.N.Z.I.V.
M. C. Plested, A.N.Z.I.V.
M. I. Penrose, A.N.Z.I.V., V.P.U., Dip.V.F.M.
Directory
282
SIMKIN & ASSOCIATES LTD
REGISTERED VALUERS, PROPERTY
CONSULTANTS AND MANAGERS
18 Dickens Street, Napier.
P.O. Box 23, Napier.
Phone (070) 57-599.
Dale L. Simkin, A.N.Z.I.V., A.R.E.I.N.Z., M.P.M.I.
TARANAKI
HUTCHINS & DICK
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
53 Vivian Street, New Plymouth.
P.O. Box 321, New Plymouth.
Phone (067) 75-080.
117-119 Princess Street, Hawera.
Phone (062) 86-124.
Frank L. Hutchins, Dip.Urb.Val., A.N.Z.I.V.
A. Maxwell Dick, Dip.V.F.M., Dip.Agr., A.N.Z.I.V.
Mark A. Muir, V.P.Urb., A.N.Z.I.V.
LARMER & ASSOCIATES
REGISTERED VALUERS, PROPERTY AND
MANAGEMENT CONSULTANTS
51 Dawson Street, New Plymouth.
P.O. Box 713, New Plymouth.
Phone (067) 75-753.
J. P. Larmer, Dip.V.F.M., Dip.Agr., F.N.Z.I.V., M.N.Z.S.F.M
R. M. Malthus, Dip.S.V.F.M., Dip.Agr., V.P.Urb., A.N.Z.I.V.
P. M. Hinton, V.P.Urb., Dip.V.P.M., A.N.Z.I.V.
WANGANUI
ALAN J. FAULKNER
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
Room 1, Victoria House, 257 Victoria Avenue,
Wanganui.
P.O. Box 456, Wanganui.
Phone (064) 58-121.
A. J. Faulkner, A.N.Z.I.V., M.P.M.I.
CENTRAL DISTRICTS
D. J. LOVELOCK & CO. LTD
lst Floor, Amesbury Court Building,
28 Amesbury Street, Palmerston North.
P.O. Box 116, Palmerston North.
Phone (063) 72-149.
Colin V. Whitten, A.N.Z.I.V., Registered Valuer, F.R.E.I.N.Z.
J. P. MORGAN & ASSOCIATES
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
222 Broadway and Cnr Victoria Avenue,
Palmerston North.
P.O. Box 281, Palmerston North.
Phone (063) 71-115.
J. P. Morgan, F.N.Z.I.V.
P. J. Goldfinch, A.N.Z.I.V.
M. A. Ongley, A.N.Z.I.V.
J. H. P. Harcourt, A.N.Z.I.V.

WELLINGTON
DARROCH SIMPSON & CO. -
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
279 Willis Street, Wellington.
P.O. Box 27-133, Wellington.
Phone (04) 845-747.
D. M. Simpson, A.N.Z.I.V.
G. J. Horsley, F.N.Z.I.V., A.C.I.Arb., M.P.M.I.
C. W. Nyberg, A.N.Z.I.V., A.R.E.I.N.Z.
A. G. Stewart, B.Com., Dip.Urb.Val., A.N.Z.I.V.,
A.R.E.N.Z.I.V., A.C.I.Arb., M.P.M.I.
M. A. Horsley, A.N.Z.I.V.
S. E. Mackay, B.B.S.
C. J. DENTICE & ASSOCIATES
REGISTERED VALUERS
3rd Floor, 20 Brandon Street, Wellington.
P.O. Box 10-332, Wellington.
Phone (04) 725-793.
Christopher J. Dentice, Dip.Urb.Val., B.C.A., A.N.Z.I.V.
David J. M. Perry, A.N.Z.I.V., A.R.E.I.N.Z.
GELLATLY, ROBERTSON & CO.
PUBLIC VALUERS
General Building, Waring Taylor St, Wellington 1.
P.O. Box 2871, Wellington.
Phone (04) 723-683.
B. J. Robertson, F.N.Z.I.V.
M. R. Hanna, F.N.Z.I.V., F.C.I.Arb.
A. L. McAlister, F.N.Z.I.V.
J. N. B. Wall, F.N.Z.I.V., F.C.I.Arb., Dip.Urb.Val.
R. F. Fowler, A.N.Z.I.V.
A. J. Brady, A.N.Z.I.V.
W. J. Tiller, A.N.Z.I.V.
T. J. Reeves, A.N.Z.I.V.
D. S. Wall, A.N.Z.I.V.
GORDON HARCOURT & BLACKLEY LTD
PUBLIC VALUERS
Huddart Parker Building, 1 Post Office Square,
Wellington.
P.O. Box 1747, Wellington.
Phone (04) 722-113.
Barrie A. J. Blackley, A.N.Z.I.V., A.R.E.I.N.Z.
E. K. Ormrod, A.N.Z.I.V., A.C.I.Arb.
HARCOURTS EDWARD RUSHTON
REGISTERED VALUERS
Harcourts Building, Cnr Lambton Quay
and Grey Street, Wellington.
P.O. Box 151, Wellington.
Phone (04) 726-209.
Telex NZ 31401.
R. H. Fisher, A.N.Z.I.V., A.C.A., F.R.E.I.N.Z., M.P.M.I.
W. M. Smith, A.N.Z.I.V., A.C.I.Arb., M.P.M.I.
J. A. Kennedy, M.B.E., A.N.Z.I.V., F.R.E.I.N.Z., F.C.I.Arb.,
M.P.M.I.
W. H. Doherty, A.N.Z.I.V., M.P.M.I.
P. W. Senior, A.N.Z.I.V.
R. S. Arlidge, A.N.Z.I.V.
W. F. W. Leckie, A.N.Z.I.V., M.P.M.I., A.R.E.I.N.Z.
G. R. Corlieson, A.N.Z.I.V.
T. M. Truebridge, B.Agr.(Val.).
R. V. Thompson, A.N.Z.V.., A.R.E.I.N.Z., F.P.M.I.
Professional Directory
283
P. R. HOLMES & ASSOCIATES
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
1 High Street, Lower Hutt.
P.O. Box 30590, Lower Hutt.
Phone (04) 663-529, 698-483.
A. E. Davis, A.N.Z.I.V.
Consultant:
P. R. Holmes, A.R.E.I.N.Z., A.C.I.Arb., F.N.Z.I.V.
Associates:
M. W. Brunt, A.N.Z.I.V.
C. H. M. Beattie, A.N.Z.I.V.
GEORGE NATHAN & CO. LTD
VALUERS, ARBITRATORS AND PROPERTY
CONSULTANTS
190-198 Lambton Quay, Wellington.
P.O. Box 5117, Wellington.
Phone (04) 729-319 (12 lines).
Telex NZ 3353 (Code Wn 11).
Michael J. Nathan, F.N.Z.I.V., A.R.E.I.N.Z., P.M.C.
William D. Bunt, A.N.Z.I.V.
David R. Hitchins, A.N.Z.I.V.
112-114 High Street, Lower Hutt.
P.O. Box 30520, Lower Hutt.
Phone (04) 661-996.
ROLLE ASSOCIATES LTD
VALUERS, PROPERTY MANAGERS
`Rolle House', 6 Cambridge Terrace, Wellington.
P.O. Box 384, Wellington.
Phone (04) 843-948.
A. E. O'Sullivan, Registered Valuer, A.N.Z.I.V., M.P.M.I.,
A.N.Z.I.M., A.R.E.I.N.Z., Dip.Bus.Admin.
C. Cleverley, Registered Valuer, Dip.Urb.Val.(Hons), A.N.Z.I.V.
A. C. Remmerswaal, B.B.S.(Val. & Pty.Mgmt.).
NELSON/MARLBOROUGH
ANGUS S. McDONALD
REGISTERED VALUER, PROPERTY
CONSULTANT, PROPERTY MANAGER
1st Floor, 134 Bridge Street, Nelson.
P.O. Box 4033, Nelson South.
Phone (057) 84-723.
A. S. McDonald, A.N.Z.I.V., M.P.M.I.
LINDSAY A. NEWDICK
REGISTERED PUBLIC VALUER, RURAL AND
URBAN
P.O. Box 830, Blenheim.
Phone (057) 88-577.
Lindsay A. Newdick, Dip.Ag., Dip.V.F.M., A.N.Z.I.V.,
A.R.E.I.N.Z.
CANTERBURY/WESTLAND
BAKER BROS. (ESTATE AGENTS) LTD. -
VALUERS
153 Hereford Street, Christchurch.
P.O. Box 43, Christchurch.
Phone (03) 62-083.
Robert K. Baker, LL.B., F.N.Z.I.V., F.R.E.I.N.Z.
Gordon, E. Whale, A.N.Z.I.V., A.R.E.I.N.Z.
Errol M. Saunders, A.N.Z.I.V.

DARROCH, FRIGHT, AUBREY & CO.
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
61 Kilmore Street, Christchurch.
P.O. Box 966, Christchurch.
Phone (03) 791-438.
R. H. Fright, F.N.Z.I.V., A.R.E.I.N.Z., M.P.M.I.
R. A. Aubrey, A.N.Z.I.V.
G. B. Jarvis, A.N.Z.I.V.
G. R. Sellars, A.N.Z.I.V.
HARCOURTS EDWARD RUSHTON
REGISTERED VALUERS
42 Rotherham Street, Riccarton.
P.O. Box 8054.
Phone (03) 488-784.
N. J. Johnson, A.N.Z.I.V.
TELFER, HALLINAN, JOHNSTON & CO.
REGISTERED PUBLIC VALUERS AND
PROPERTY CONSULTANTS
93-95 Cambridge Terrace, Christchurch.
P.O. box 2532, Christchurch.
Phone (03) 797-960.
Ian R. Telfer, F.N.Z.I.V., A.R.E.I.N.Z.
Roger E. Hallinan, Dip.Urb.Val., F.N.Z,I.V., A.R.E.I.N.Z.
Roger A. Johnston, A.N.Z.I.V.
Alan J. Stewart, Dip.V.F.M., A.N.Z.I.V. (Urban & Rural).
C. N. Stanley, A.N.Z.I.V.
SOUTH CANTERBURY
Professional Directory
FITZGERALD & ASSOCIATES
REGISTERED PUBLIC VALUERS, PROPERTY
MANAGEMENT CONSULTANTS
49 George Street, Timaru.
P.O. Box 843, Timaru.
Phone (056) 47-066.
E. T. Fitzgerald, Dip.Ag., Dip.V.F.M., V.P.(Urb.), A.N.Z.I.V,
M.N.Z.S.F.M.
L. G. Schrader, B.Ag.Com.(V.F.M.), A.N.Z.I.V.
G. J. Paterson, V.P.(Urb.), A.N.Z.I.V.
COLIN McLEOD & ASSOCIATES LTD
REGISTERED VALUERS
324 East Street, Ashburton.
P.O. Box 119.
Phone (053) 88-209.
Colin M. McLeod, A.N.Z.I.V., A.R.E.I.N.Z.
Paul J. Cunneen, B.Ag.Com.V.F.M., A.N.Z.I.V.
MORTON & CO. LTD
REGISTERED PUBLIC VALUERS AND
PROPERTY MANAGEMENT CONSULTANTS 11
Cains Terrace, Timaru.
P.O. Box 36, Timaru.
Phone (056) 86-051.
G. A. Morton, A.N.Z.I.V., A.R.E.I.N.Z., V.P.(Urb.).
H. A. Morton, A.N.Z.I.V., A.R.E.I.N.Z.
REID & WILSON
REGISTERED VALUERS 167-
169 Stafford Street, Timaru. P.O.
Box 38, Timaru.
Phone (056) 84-084.
C. G. Reid, F.N.Z.I.V., F.R.E.I.N.Z.
R. B. Wilson, A.N.Z.I.V., F.R.E.I.N.Z.
284
OTAGO
W. O. HARRINGTON
REGISTERED VALUER AND FARM
MANAGEMENT CONSULTANT
P.O. Box 760, Dunedin.
Phone (024) 779-466.
Wm. O. Harrington, Dip.V.F.M., F.N.Z.I.V., A.R.E.I.N.Z.,
M.N.Z.S.F.M.
LAINCO RURAL LTD
PUBLIC VALUERS
CML Building, 276 Princes Street, Dunedin.
P.O. Box 587, Dunedin.
Phone (024) 773-183.
A. P. Laing, B.Com., Dip.Ag., Dip.V.F.M., F.N.Z.I.V., A.C.A.
J. O. MACPHERSON & ASSOCIATES
REGISTERED VALUERS (URBAN AND
RURAL), PROPERTY AND MANAGEMENT
CONSULTANTS
Westpac Building, 169 Princes Street, Dunedin.
P.O. Box 497, Dunedin.
Phone (024) 775-796.
G. E. Burns, Dip.Urb.Val., F.N.Z.LV., F.P.M.I.
J. A. Fletcher, A.N.Z.I.V., A.R.E.I.N.Z., M.P.M.I.
W. S. Sharp, A.N.Z.I.V.
J. Dunckley, B.Ag.Com., A.N.Z.I.V.
B. E. Paul, A.N.Z.I.V.
D. M. Barnsley, Dip.Urb.Val., A.N.Z.I.V.
Consultant:
J. O. Macpherson, Dip.Urb.Val., F.N.Z.I.V.
N. & E. S. PATERSON LTD
VALUERS, LAND PLANNING AND
DEVELOPMENT
8-10 Broadway, Dunedin.
P.O. Box 221, Dunedin.
Phone (024) 778-693.
Branches at Alexandra, Mosgiel, Queenstown.
M. C. Paterson, B.Com., M.I.S.N.Z., A.N.Z.I.V.,
F.R.E.I.N.Z.
SOUTHLAND
BRISCOE & MUNYARD
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
21 Tay Street, Invercargill.
P.O. Box 1523, Invercargill.
Phone (021) 4470, 4471.
J. W. Briscoe, Dip.V.F.M., F.N.Z.I.V., M.N.Z.S.F.M.
S. M. Munyard, V.P.Urb., A.N.Z.I.V.
DAVID FEA & ASSOCIATES
REGISTERED PUBLIC VALUER AND
PROPERTY MANAGEMENT CONSULTANT
49 Shotover Street, Queenstown.
P.O. Box 583, Queenstown.
Phone 1583, Queenstown.
97 Tay Street, Invercargill.
P.O. Box 1747, Invercargill.
Phone (021) 4042, Invercargill.
David B. Fea, B.Comm.(Ag.), A.N.Z.I.V.

J. O. MACPHERSON & ASSOCIATES
REGISTERED VALUERS AND PROPERTY
CONSULTANTS
1st Floor, 182 Dee Street, Invercargill.
P.O. Box 535, Invercargill.
Phone (021) 87-378.
Wayne John Wootton, A.N.Z.I.V.
M. Aslin, Dip.Urb.Val., A.N.Z.I.V.
DAVID MANNING & ASSOCIATES
REGISTERED VALUERS, REGISTERED FARM
MANAGEMENT CONSULTANTS AND
PROPERTY MANAGEMENT CONSULTANTS
97 Tay Street, Invercargill.
P.O. Box 1747, Invercargill.
Phone (021) 4042, 394-537.
D. L. Manning, Dip.V.F.M., A.N.Z.I.V., M.N.Z.S.F.M.,
Val.Prof.Urb., M.P.M.I.
BARRY J. ROBERTSON & ASSOCIATES
REGISTERED PUBLIC VALUERS AND
PROPERTY MANAGEMENT CONSULTANTS
231 Dee Street, Invercargill.
P.O. Box 738, Invercargill.
Phone (021) 4555, Invercargill.
P.O. Box 455, Queenstown.
Phone 1458, Queenstown.
Barry J. P. Robertson, A.N.Z.LV., A.R.E.I.N.Z., M.P.M.I.
Tony J. Chadderton, A.N.Z.I.V.
Professional Directory
OVERSEAS
SEE SAN APPRAISAL PTE. LTD
INTERNATIONAL PROPERTY CONSULTANTS
151 Chin Swee Road No.02-20, Manhattan House,
Singapore 0316.
Phone 7335688.
Telex RS 39460 NSP.
Associated Offices in New Zealand, United Kingdom,
United States of America, Malaysia and Indonesia.
Lee See San, Dip.Urb.Val. (Auckland), A.N.Z.I.V., F.S.I.S.V.,
Registered Valuer.
RICHARD ELLIS SOUTH AFRICA (PTY) LTD
(Formerly Dunlop Heywood).
INVESTMENT AND DEVELOPMENT
CONSULTANTS AND VALUERS
11th Floor, Hunt's Corner, 20 New Street,
South Johannesburg 2001, South Africa.
P.O. Box 342, Johannesburg 2000.
Phone 833-1320.
Telex 4-85156.
B. R. MacLean, A.N.Z.I.V.
Printed by Devon Colour Printers Ltd, P.O. Box 40-020, Glenfield, Auckland.
Typesetting by Cotswold Typesetting, P.O. Box 35-381, Browns Bay, Auckland 10.

5/85 ISSN 0112-2045
ISSN 0027-7282