Opening their mail last week, Pauline and Robin Cox thought the Stanwell Park address on the front of the envelope must have been wrong.
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The letter the retired couple had received was from the NSW Valuer General, informing them of their land value for July 1, 2022. The figure was much higher than they could have believed.
"We just thought that's ridiculous," Mr Cox said. "That's over a 100 per cent increase. Nothing doubles in three years."
After being valued at $694,000 in 2019, the new valuation put their block of land at $1.44 million.
The Coxs are not alone. Roughly one tenth of all property owners in the Illawarra found the value of their land increased by more than 50 per cent. In the postcodes of 2515 and 2508, covering the northern suburbs of the Illawarra, the average land value increase was 38 per cent, in line with the average across the region.
Concerned residents have been sharing the eye popping increases in value on local community pages and local real estate agent Ian Craig Pepper said 20 residents in the Stanwell Park area had contacted him to begin the process of lodging an objection.
Anecdotally, price rises have been particularly high in the northern suburbs of the Illawarra, particularly around Stanwell Park and Coalcliff. Mr Pepper's colleague Mattias Samuelsson said that was because of unusual activity in the property market in the past 12 months.
"There were quite a few significant waterfront sales," he said "Beachfront, cliff-front properties are very rarely sold, but we did see quite a few of them in the last one to two years."
The NSW Valuer General calculates land values for each property based on sales in the surrounding area and provides each land-owner an estimate of their property's value at 1 July of that year. During the peak of the property market, homes such the cliffside 209 Lawrence Hargrave Drive sold for $5,715,100, a million dollars higher than the previous record.
But since then, the market has cooled off.
"Remember that everyone, during COVID, wanted to get out of Sydney," Mr Pepper said. "So rich people that were stuck in Sydney and couldn't go overseas, they came down and bidded like crazy for all these oceanfront properties. This year, it's not even happening. It's nowhere near that sort of level of activity."
Both agents estimate that prices of properties have dropped off by between 15 and 20 per cent.
Despite these statistics, the Cox's say it does not make sense to compare their bungalow to those with uninterrupted water views.
"Our home is on a small block and further back from the beach. It's incomparable to us," Mr Cox said.
"We have an easement running down the side of the block and a creek at the rear of the property, land which we cannot utilise," Mrs Cox said.
"They should individually value people's properties."
A spokesperson for Valuation NSW said that a mass valuation approach is used to value properties.
"Local properties that have similar attributes (such as location, size and amenity) and are expected to experience similar changes in values are grouped into 'components' and then representative 'benchmark' properties are selected for valuation," the spokesperson said.
"Valuations are determined by professional contract valuers familiar with the local area."
While the impact of land value rises for ratepayers is minimal, with the total rate that any council can charge set by the NSW independent Pricing and Regulatory Tribunal, land value increases do have a direct impact on investment property owners who pay land tax.
Muthusamy Chandrasekaran and his wife own a parcel of land on Lawrence Hargrave Drive.
Their valuation also increased dramatically, from $1.37 million in 2019 to $3,710,000 in 2022.
Mr Chandrasekaran bought the clifftop property in 2003 for $1.3 million and leased out the old miners cottage for over a decade. However, the house was one of three homes destroyed by fire in 2017, and due to the challenging nature of the site, Mr Chandrasekaran has had builders turn him down to build a new structure.
"It is unrealistic," he said. "In my opinion, if we are able to sell it today, we will be struggling to get half the value."
Despite this, Mr Chandrasekaran estimates his land tax bill will be in the tens of thousands of dollars higher as land tax - levied on properties that are not a taxpayer's primary residence - is calculated based on the NSW Valuer General's assessment of the land's value.
For now, Pauline and Robin are preparing to submit an objection to their new valuation and gathering all the evidence they can.
"You only get one chance," Mrs Cox said.
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