Journal articles and other professional publications

E. Percy, A Bailey, A Wreford, G Garner (Lincoln University, Christchurch, New Zealand)
Gary Owen Garner (New Zealand Institute of Valuers)

Proceedings of the Property Institute of New Zealand Annual Conference, June 2023

The National Policy Statement for Freshwater Management heralded freshwater regulation rollout in Aotearoa-New Zealand, largely coming into full effect in 2017. New rules introducing a framework for management of freshwater resources were and continue to be progressively introduced at regional levels. A primary aim is to reduce pollution through a focus on nonpoint source nutrient leaching and runoff from farms. Areas of differing environmental risk have been identified and specific nutrient and other rules applied. As a result, the regulations associated with this serve to place controls on productivity in accord with the zoning rules applying for a particular region. On the basis that land value is closely linked to its productive capacity, the value of land is also potentially affected since management systems and farm inputs are constrained. This paper reports on a study that examined the perceived impacts on the farming community at the time that the regulations came into effect, and the actual impact of those regulations five years later, including impact on land value. The study was conducted using a qualitative case study approach.

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Gary Owen Garner and Patricia Kuczynska

Property Professional, Autumn 2022. Property Institute of New Zealand · Mar 24, 2022

This article looks at the role of valuers in the fast-moving area of climate change and its effects.

The emergence of issues surrounding climate change is a swiftly moving area in which most people would agree is increasingly commanding the attention of regulators, the media, environmentalists and the general public. Equally, it is also an evolving matter demanding earnest consideration by New Zealand businesses. Following the 2021 United Nations COP26 Climate Change Conference, a recent Knight Frank report points out that almost every country on earth is now working to tackle climate change. Moreover, this report (Harley et al., 2021) looks specifically at how the world of real estate is adapting, and how the property market might look in the future.

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Gary Owen Garner

Property Professional (Summer 2021) pp 10-13, 2021

There has been an increasing amount of commentary in recent times promoting wider application for digital valuation tools. While these new Automated Valuation Models (AVMs) have their place, they are most certainly not a replacement for registered valuers conducting professional valuations. There is a good analogy here with autonomous (self-drive) cars. The technology may be fantastic, but occasionally things can, and do, go horribly wrong. And, as for autonomous vehicles, the result can be absolute carnage.

The paradox here is that during their university training (a threeto-four-year programme), aspiring valuers are specifically taught how not to act just like a computer. They are trained to recognise the dangers inherent in relying upon purely mathematical averages and algorithms – yet at the same time, learning how to take such information into account. And, of critical importance, they are taught how to exercise human balance and judgement – something that computers typically find quite impossible to mirror.

Registered valuers also have an additional period of three years of internship after graduating before they can sign-off a valuation report. This means having a total of six to seven years of training before being able to legally operate. Registered valuers are also required to undertake their activities in accordance with the Valuers Act (1948) and associated Ministerially approved New Zealand Institute of Valuers (NZIV) Rules and Code of Ethics.

Aside from being required to maintain their professional competency, registered valuers are also required to act independently and with complete impartiality, regardless of who the client is that is hiring them. Furthermore, under the Valuers Act the NZIV has a legal duty to protect the interests of the public in relation to valuations of land and related subjects. There is no such mandate or requirement for AVMs

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Gary Owen Garner

Valuer's Education & Integrity Foundation. · Apr 1, 2020

This paper provides a summary of water rights as they currently exist across New Zealand, the
variability of ownership and interests, and how these rights are being impacted by regulatory control
amongst a raft of various stakeholder claims and involvement. It relates specifically to “fresh” water,
i.e. all water except coastal seawater, and geothermal water.

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Gary Owen Garner and Edward Percy

European Real Estate Society 23rd Annual Conference, Regensburg, Bavaria/Germany · Jun 8, 2016

Freshwater regulation is rolling out around Aotearoa-New Zealand following the National Policy Statement for Freshwater Management 2011 and 2014 which introduced a framework for management of freshwater resources. After community collaboration new rules are being progressively introduced at regional levels to reduce freshwater pollution through a focus on nonpoint source nutrient leaching and runoff from farms. Areas of differing environmental risk and set nitrate leaching limits for different zones create water management zones where specific nutrient rules apply. As a result, the regulations associated with this serve to place controls on productivity in accord with the particular zoning rules. On the basis that land value is closely linked to its productive capacity, the value of land is also potentially affected since current management systems and farm inputs are constrained. This report endeavours to understand how this new wave of regulation is currently impacting land values and what the perceived impacts are as regulations come into effect.

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John McDonagh, Gary Owen Garner, Brent Nahkies

Submission by Lincoln University, August 2014

We would like to submit our general support of the thrust of the NZIV submission. In particular, the proposals around continuing professional development and the requiring of a formalised education program between graduation and registration would be positive additions to the profession. Education should not be viewed as something that ends at graduation, and it is vital that members of the profession have continued educational support both for registration and throughout their careers. We would also endorse and support the PINZ submission's views on transparency, practice standards, and capping liability.

Furthermore, Lincoln is intimately involved with continuing professional development for the valuation community - for example, we are the lead sponsor and venue for the Lincoln Mainland Seminar, the premier South Island educational event for valuers which spans two days. One of our lecturers, Dr. Gary Garner, also sits on both the education committee and the Board of the Property Institute.

We also share the concerns of the NZIV around whether the profession will be able to fund its own educational resources in a non-mandatory membership environment.

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Gary Owen Garner

19th Annual European Real Estate Society Conference. ERES: Conference. Edinburgh, Scotland, 2012.

Developer infrastructure contributions are regularly cited as the most significant contributor of planning or development costs. However, other non-financial barriers are also emerging as significant impactors. This includes inconsistent planning requirements, development assessment procedures, and conflicts between developers and local councils. Such findings have underpinned a diverse range of planning reforms currently underway in various regions throughout Australia, many of which are specifically designed to target these ìnon-financialî barriers. Examples include systematic enhancements intended to provide greater standardisation, and reduced administrative requirements, system complexity and timeliness. However, aside from the advent of new infrastructure charging regimes that address cost barriers, it is apparent that these reforms actually address another invasive impact relating to holding costs - rather than the infrastructure charging regime itself. It is indisputable that developer infrastructure costs strongly impact housing costs and therefore affordability: and, compared to holding costs, they are much more visible and easily quantified. In contrast, holding costs may seem less tangible as they typically stem from issues revolving around uncertainty, timeliness and inconsistency. Nonetheless, it can be established that they represent a potentially formidable financial barrier. In determining the impact of holding costs, this paper presents a number of operating scenarios and in the process identifies the financial benefits arising from planning reform and intervention. Whilst in many cases it may be true that development contributions expended towards infrastructure represent the largest planning related cost, their existence also impacts part of the holding cost equation which together with its other elements may be demonstrated to rival apparently more pervasive, obvious costs involved in property development.

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Gary Owen Garner

22nd Annual Pacific-Rim Real Estate Society Conference, Sunshine Coast, Queensland, Australia · Jan 10, 2016

Problem/Purpose
The economic importance of forestry as a significant industry in Aotearoa is easily demonstrated, contributing billions to New Zealand’s GDP and directly employing of tens of thousands of people. Their importance to Māori is demonstrably even more fundamental whereby a broader set of principles other than those based on individual property rights and economic values are solidly embraced. To Māori, forests are regarded as “taonga” – a “treasure” – and as such are culturally significant assets that are congruent with values emphasising guardianship over ownership, collective and co-operative rights over individualism, obligations towards future generations, and the need to manage resources sustainably.

Design/methodology/approach
This is an observational paper (narrative review) examining the proposition that Māori in contemporary New Zealand are likely to balance economic objectives with social, cultural and spiritual values - even though the embedding of cultural Māori values and principles - especially those relating to environmental protection - are still held to strongly.

Findings
Whilst the proportion of funds relating to forestry settlements under the Treaty of Waitangi underpins the enormity of importance attached to forests, their significance proceeds beyond traditional economic or social measures. Furthermore, the redress amount, or fixed capital sum provided under any Treaty Deed of Settlement agreed to by the Crown tells only part of the story in terms of property settlement and compensation. The more complete picture is that ownership of the land, or part thereof, in addition to accumulated rentals for Crown Licensed Forests has been recovered. In addition, various sites of cultural and spiritual significance located on public conservation land - some of which may contain forest lands – are also included as part of the final redress, thereby further distorting the full compensation amount actually being paid. Notwithstanding, the total compensation package typically represents only a fraction of the current market value of dispossessed land.

Originality/value
This paper provides a cross-disciplinary review of relevant literature on the topic with linkages developed for establishing a theoretical evaluative framework.

Social Implications
Forestry claim settlements and the related Waitangi Tribunal and its legislated processes, though not perfect processes, have nonetheless facilitated a useful mechanism whereby the Crown’s acknowledgement of grievances, formal apology, cultural redress, along with financial and commercial compensation, have gone some way towards recompensing actions and omissions by the Crown since 1840.

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Gary Owen Garner

19th Annual Pacific-Rim Real Estate Society Conference. Melbourne Australia, 13-16 January 2013

The impact of holding costs on greenfield residential housing developments is becoming increasingly recognised as a major factor affecting housing affordability. This has led a number of jurisdictions throughout Australia to examine methods of streamlining procedures and processes (“red tape”) in ways that curtail otherwise protracted regulatory appraisal procedures along the property development pipeline. Using a structured anonymous questionnaire, one major initiative in Queensland seeking to redress “red tape” - the development of electronic development application processes – is tested by gauging industry participant’s perceptions of their effectiveness. This information is also used to examine linkages that exist between various planning instruments, the length of regulatory assessment periods, and perceptions concerning housing affordability more generally. In addition, these results are able to be triangulated against quantitative data modelling focussed on the consequences of extended assessment periods as a typically critical component of holding costs.

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Gary Owen Garner

16th Pacific Rim Real Estate Society Conference Wellington, New Zealand 24-27 January 2010

There are increasing indications that the contribution of holding costs and its impact on housing affordability is very significant. Their importance and perceived high level impact can be gauged from considering the unprecedented level of attention policy makers have given them recently. This may be evidenced by the embedding of specific strategies to address burgeoning holding costs (and particularly those cost savings associated with streamlining regulatory assessment) within statutory instruments such as the Queensland Housing Affordability Strategy, and the South East Queensland Regional Plan. However, several key issues require further investigation. Firstly, the computation and methodology behind the calculation of holding costs varies widely. In fact, it is not only variable, but in some instances completely ignored. Secondly, some ambiguity exists in terms of the inclusion of various elements of holding costs and assessment of their relative contribution. Perhaps this may in part be explained by their nature: such costs are not always immediately apparent. They are not as visible as more tangible cost items associated with greenfield development such as regulatory fees, government taxes, acquisition costs, selling fees, commissions and others. Holding costs are also more difficult to evaluate since for the most part they must be ultimately assessed over time in an ever-changing environment based on their strong relationship with opportunity cost which is in turn dependant, inter alia, upon prevailing inflation and / or interest rates. This paper seeks to provide a more detailed investigation of those elements related to holding costs, and in so doing determine the size of their impact specifically on the end user. It extends research in this area clarifying the extent to which holding costs impact housing affordability. Geographical diversity indicated by the considerable variation between various planning instruments and the length of regulatory assessment periods suggests further research should adopt a case study approach in order to test the relevance of theoretical modelling conducted.

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Gary Owen Garner

Queensland University of Technology (PhD thesis, Queensland University of Technology) · 18 June 2012

The position of housing demand and supply is not consistent. The Australian situation counters the experience demonstrated in many other parts of the world in the aftermath of the Global Financial Crisis, with residential housing prices proving particularly resilient. A seemingly inexorable housing demand remains a critical issue affecting the socio-economic landscape. Underpinned by high levels of population growth fuelled by immigration, and further buoyed by sustained historically low interest rates, increasing income levels, and increased government assistance for first home buyers, this strong housing demand level ensures problems related to housing affordability continue almost unabated. A significant, but less visible factor impacting housing affordability relates to holding costs. Although only one contributor in the housing affordability matrix, the nature and extent of holding cost impact requires elucidation: for example, the computation and methodology behind the calculation of holding costs varies widely - and in some instances completely ignored. In addition, ambiguity exists in terms of the inclusion of various elements that comprise holding costs, thereby affecting the assessment of their relative contribution. Such anomalies may be explained by considering that assessment is conducted over time in an ever-changing environment. A strong relationship with opportunity cost - in turn dependant inter alia upon prevailing inflation and / or interest rates - adds further complexity. By extending research in the general area of housing affordability, this thesis seeks to provide a detailed investigation of those elements related to holding costs specifically in the context of midsized (i.e. between 15-200 lots) greenfield residential property developments in South East Queensland. With the dimensions of holding costs and their influence over housing affordability determined, the null hypothesis H0 that holding costs are not passed on can be addressed. Arriving at these conclusions involves the development of robust economic and econometric models which seek to clarify the componentry impacts of holding cost elements. An explanatory sequential design research methodology has been adopted, whereby the compilation and analysis of quantitative data and the development of an economic model is informed by the subsequent collection and analysis of primarily qualitative data derived from surveying development related organisations. Ultimately, there are significant policy implications in relation to the framework used in Australian jurisdictions that promote, retain, or otherwise maximise, the opportunities for affordable housing.

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Gary Owen Garner, and Chris Eves

International Conference on Construction and Real Estate Management, Royal on the Park Hotel, Brisbane, Queensland · Oct 18, 2010

Many of the costs associated with greenfield residential development are apparent and tangible. For example, regulatory fees, government taxes, acquisition costs, selling fees, commissions and others are all relatively easily identified since they represent actual costs incurred at a given point in time. However, identification of holding costs are not always immediately evident since by contrast they characteristically lack visibility. One reason for this is that, for the most part, they are typically assessed over time in an ever-changing environment. In addition, wide variations exist in development pipeline components: they are typically represented from anywhere between a two and over sixteen years time period - even if located within the same geographical region. Determination of the starting and end points, with regards holding cost computation, can also prove problematic. Furthermore, the choice between application of prevailing inflation, or interest rates, or a combination of both over time, adds further complexity. A review of the literature reveals attempts to identify holding cost components are limited. Their quantification (in terms of relative weight or proportionate cost to a development project) is even less apparent; in fact, the computation and methodology behind the calculation of holding costs varies widely and in some instances completely ignored. In addition, it may be demonstrated that ambiguities exists in terms of the inclusion of various elements of holding costs and assessment of their relative contribution. This paper seeks to build on earlier investigations into those elements related to holding costs, providing theoretical modelling of the size of their impact - specifically on the end user. Although this research stops short of cross-referencing with a regional or international comparison study, an improved understanding of the relationship between holding costs, regulatory charges, and housing affordability results.

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Garner, Gary

Valuation of Land Amendment Act 2008: Value definition re-defined. THG. (2008)

The recently passed Valuation of Land Amendment Act (2008) in Queensland has significant implications for developers since the basis on which unimproved land is valued has changed. The unimproved value is the basis for completion of statutory valuations which are used for calculating: · Rates charges levied by local government · Land taxes charged by State Government · Land rentals as calculated by NRW · allocation of federal funding by the Commonwealth Grants Commission The effect of this new Act requires the introduction of new terms and definitions to “value”

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