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Market Valuation

2 Norman StreetLower VogeltownNew Plymouth District

Client: Juffermans Surveyors Ltd

Prepared For: ANZ Bank New Zealand Limited

Valuation Date: 16 July 2019

TelferYoung (Taranaki) Limited

TelferYoung (Taranaki) Limited143 Powderham Street, PO Box 713, New Plymouth 4340, NEW ZEALAND

Phone : 06 757 5753email : [email protected] website : www.telferyoung.com

Table of Contents

1.0 Valuation Summary .....................................................................................................................3

2.0 Scope of Work .............................................................................................................................4

3.0 Legal Description .........................................................................................................................6

4.0 Resource Management ...............................................................................................................7

5.0 Rating Valuation and Statutory Charges .....................................................................................8

6.0 Location .......................................................................................................................................9

7.0 Land...........................................................................................................................................10

8.0 Improvements ............................................................................................................................11

9.0 Market Summary .......................................................................................................................14

10.0 Valuation Rationale....................................................................................................................16

11.0 Valuation....................................................................................................................................21

12.0 Significant Assumptions and Special Assumptions ...................................................................21

13.0 Risk Analysis .............................................................................................................................22

14.0 Statement of Limiting Conditions and Valuation Policy .............................................................23

Appendix A: Record of TitleAppendix B: Additional Photographs

http://www.telferyoung.com/

The Valuation Summary must be read in conjunction with the formal valuation report and with TelferYoung (Taranaki) Limited's Statement of Limiting Conditions and Valuation Policy.

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++ Local Knowledge, National CoverageOur Ref: TAR-1590652 Norman Street, Lower Vogeltown, New Plymouth District telferyoung.com

1.0 Valuation Summary

Address: 2 Norman Street, Lower Vogeltown, New Plymouth District 4310

Instructed By: Allen Juffermans

Report Prepared For: ANZ Bank New Zealand LimitedPO Box 42Taranaki Mail CentreNew Plymouth 4340

Attention: Mark Lundt

Borrower: Juffermans Surveyors Ltd

Purpose of Valuation: Market Value for mortgage lending purposes.

Brief Description: Built in the 1940's, this is a 3-4 bedroom, 1 bathroom, stucco clad home with a detached single carport and a covered timber deck, situated upon a 501 m² site within the Lower Vogeltown locality.

Floor Areas: Dwelling: 112.0 m2

Deck: 32.0 m2


Valuation: Five Hundred and Forty Thousand Dollars ($540,000) including GST (if any). The valuation is inclusive of $8,000 chattels.

Contract for Sale: The property is not on the market.

Last Sale: None within the last three years.

Type of Property: Single dwelling

Significant Risks: The property is considered to have an average risk profile in comparison with other residential properties in the locality.

Significant Assumptions and Special Assumptions:

Nil

Report Issue Date: 18 July 2019

Prepared By: Kieran Glentworth - B Ag Com (RVM) Valuer

Kelvin Gifford - BBS (VPM); ANZIV; SPINZRegistered Valuer

TelferYoung policy requires that reports cannot be reassigned for any purpose beyond 90 days from the date of valuation. This policy has been set to meet professional indemnity insurance requirements. It is a condition of this report that any valuation needing to be reassigned beyond 90 days may require re-inspection by the valuer with an update fee charged.

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2.0 Scope of Work

2.1 The Valuer

The valuation has been undertaken by Kieran Glentworth and Kelvin Gifford who provide this objective and unbiased valuation. The valuers have no material connection with the instructing party or interest in the property and have the appropriate qualifications and experience to undertake the valuation.

2.2 Our Client

Juffermans Surveyors Ltd.

Other than the client or addressee, the report may not be relied upon by any third party. We accept no liability to third parties. Written consent is required for any third party wishing to rely on this report. We reserve the right to withhold that consent, or to review the contents of the report if consent for third party use is sought.

2.3 Other Intended Users

ANZ Bank New Zealand Limited.

2.4 Purpose of the Valuation

Market Value for mortgage lending purposes. The contents of this report can be relied upon for this purpose.

2.5 Asset Valued

2 Norman Street, Lower Vogeltown, New Plymouth District 4310.

2.6 Basis of Valuation

Market Value, which is defined in International Valuation Standards 2017 as:

The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties have each acted knowledgeably, prudently and without compulsion.

2.7 Valuation Currency

All dollars quoted in this report are NZD.

2.8 Important Dates

Inspection Date: 16 July 2019


2.9 Extent of Investigations

We have carried out an inspection of exposed and readily accessible areas of the improvements. However, the valuer is not a building construction or structural expert and is therefore unable to certify the structural soundness of the improvements. Readers of this report should make their own enquiries.

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This report has been prepared for valuation purposes only and is not a geotechnical or environmental survey. If any defect is found, including structural defects, this information could impact on the value of the property.

No allowances are made in our valuations for any expenses of realisation, or to reflect the balance of any outstanding mortgages either in respect of capital or interest accrued thereon.

We have not been provided with an environmental audit of the property and we are not aware of any potential environmental concerns. Our valuation and report assume that the land and buildings are unaffected by harmful contaminants or noxious materials which may impact on value. We refer you to our Statement of Limiting Conditions and Valuation Policy on matters relating to potential contamination.

We have not conducted a land survey of the subject property and assume all improvements lie within the title boundaries.

We have not sighted a current Land Information Memorandum for the subject property during the course of this valuation. Our report is subject to there being no outstanding requisitions or adverse information affecting the property.

2.10 Nature and Source of Information Relied Upon

Information used to prepare the valuation has been obtained from our property inspection and public records.

No other information or documentation of particular significance to the valuation has been relied upon without specific verification by the valuer.

2.11 Assumptions and Special Assumptions

Standard valuation assumptions made in completing the report are stated in 'Extent of Investigations' and 'Statement of Limiting Conditions and Valuation Policy'.

Significant Assumptions and Special Assumptions made within the valuation are as follows:

Nil

2.12 Reporting Format

We have prepared a formal valuation report meeting appropriate professional standards.

This valuation and report meet the Residential Valuation Standing Instructions version 1.3.

This report must be read in conjunction with TelferYoung (Taranaki) Limited's Statement of Limiting Conditions and Valuation Policy.

2.13 Valuation Standards

Our valuation has been prepared in accordance with International Valuation Standards 2017 and Australia and New Zealand Valuation Guidance Notes and Technical Information Papers.

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3.0 Legal Description

Identifier: TNC4/651

Land Registration District: Taranaki

Legal Description: Lot 1 Deposited Plan 10857

Estate: Fee Simple

Area: 501 m² (more or less)

Registered Owner/s: Allen Adrian Juffermans and RMY Trustees Limited

Interests: Mortgage to ANZ National Bank Limited Mortgage to Maria Cornelia Juffermans

Appendix: Copy of the Record of Title is included as Appendix A

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4.0 Resource Management

Territorial Authority: New Plymouth District

Plan Status: Operative

Zone: Residential A Environment Area

Zone Description: This zoning is representative of the typical allotments found in developed residential areas where connection to reticulated sewage is available. Many homes are set back from boundaries, well landscaped and are one or two storeys in height.

Development Controls: A minimum site of 450m² is permitted although subdivision of sites to 400m² is a discretionary activity and would require resource consent.

Comments: The property appears to comply with the current zoning.

4.1 Proposed Zoning

Proposed District Plan: The Operative District Plan is under review and a Draft District Plan (released 3 February 2018) has been made available for public feedback, before Council prepares a Proposed District Plan.

Zone: General Residential Zone

Zone Description: Most suburban housing is located in the General Residential Zone. This zone generally represents traditional suburban densities and housing forms, characterised by one or two houses per site, one to two storeys in height and set back from the boundaries. Houses are normally surrounded by areas of private open space and garden/landscaping. To provide for diversity in housing choice and affordable housing options, all zones provide opportunities for some increased density in the form of smaller scale and low rise infill and multi-unit development where appropriate.

Development Controls: Maximum building structure height: 8mMaximum site coverage: 40%Minimum subdivision Lot size: 400m²Minimum setback from road boundary: 3mMinimum setback from side boundary: 1.5mMinimum private outdoor space: 50m²Minimum permeable surface area: 25%

Comments: The draft plan has very limited weight until all the hearing and objections are resolved. As parts of the plan pass these objections, portions will become operative.

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5.0 Rating Valuation and Statutory Charges

5.1 Rating Valuation

As at 1 September 2016

Land Value $260,000Improvements Value $155,000Capital Value $415,000

Rating Valuations are conducted on a mass appraisal basis, generally once every three years, in order to provide a basis to assist territorial authorities to collect revenue through rates. Individual properties are not inspected on a regular basis and changes in the improvements may not be recorded. The rating values are expressed on a Freehold Estate basis, even when the property might be leasehold.

5.2 Statutory Charges

As at the date of valuation, the rates per annum (inclusive of GST) are as follows:

Territorial Authority $2,971.98

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6.0 Location

The subject is situated on the southwestern corner of Norman Street in the Vogeltown suburb. Vogeltown is situated towards the southern periphery of the city and is a long established residential suburb of well presented, average quality homes. There are several small shopping centres in addition to Vogeltown Primary School and Vogeltown Park, while the central business district is 3 km to the north.

New Plymouth is located on the west coast of the North Island and is Taranaki’s largest residential and commercial centre, having a population of approximately 70, 000 people. The city is well known for its beautiful parks, surf beaches and the walkway, and is establishing itself as a cultural area, particularly due to WOMAD, the integrated library and museum, and the Govett Brewster Art Gallery. New Plymouth has won several awards for sustainability, and in 2009 won an international award for the worlds most liveable community for a population under 75, 000 people.

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7.0 Land

Area: 501 m² (more or less)

Frontage: 23.64 metres (approximate)

Depth: 18.44 metres (approximate)

Shape: Regular shaped corner site

Contour: Level with the road

Services: All normal city services are available to the site

Views: Localised views

Comments: The Taranaki Regional Council monitor contaminated sites within the Taranaki area. We have viewed their website and can advise that their plans show no indication of any contamination on the site.

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8.0 Improvements

8.1 Overview

Built in the 1940's, with refurbishment since, this is a 3-4 bedroom, 1 bathroom, stucco clad home with a detached single carport and a covered timber deck.

Northern Elevation Eastern Elevation

See Appendix B for additional photographs.

8.2 Dwelling

8.2.1 Construction

Foundations: Concrete piles

Flooring: Timber

Exterior Cladding: Stucco finish over fibre cement board

Window Joinery: Timber

Roofing: Clay tile

Internal Wall Linings: Plasterboard, Timber PanellingCeiling Linings: Textured plasterboard, Plasterboard

8.2.2 Floor AreasThe floor areas, as measured are as follows:

Dwelling: 112.0 m2

Deck: 32.0 m2

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8.2.3 AccommodationEntry: A formal entry, directly into the hallway, polished floor

Hallway: Central hallway, provides access to most rooms, wall heater, double linen cupboard, polished floor

Lounge: Open plan with the kitchen, heat pump, polished floor

Kitchen: Formica benchtops, centre island bench, stainless steel sink, melteca cabinetry, pantry, single dishdrawer, gas hob, under bench oven, rangehood, timber breakfast bar, polished floor

Bathroom: Pedestal hand basin, built in bath, shower, heated towel rail, medicine cabinet, polished floor

Bedroom 1: Double size, 2 single wardrobes, wall heater, polished floor

Bedroom 2: Double size, single wardrobe, wall heater, polished floor

Bedroom 3: Twin size, single wardrobe, polished floor

Study: A separate office which could be utilised as a bedroom, polished floor

Laundry: A separate room, stainless steel tub, door to the exterior, polished floor

Deck: A large outdoor living area, timber deck, overhead louvre system, 2 gas heaters

Additional Features: Gas radiator heating system

8.2.4 Building Condition

Externally, the roof appears to be in a sound condition. The cladding appears to be in an average condition however there is one area to the northern side of the dwelling which requires repainting. Internally, the kitchen is of an average modern standard and the bathroom is slightly dated. Decoration is tidy.

8.2.5 Chattels

The dwelling is fitted with good quality chattels presented in good condition. These include dishwasher, light fittings, and window coverings.

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8.3 Other Buildings

Carport

Single: 26.0 m2

Foundations: Concrete

Flooring: Concrete

Walls: Timber framing

Roof: Trough section steel

Includes: Attached single carport, in average condition

8.4 Other Improvements

Site development includes a concrete drive and paths, timber deck, fencing, small storage shed, well established lawns, and landscaping of an average standard.

Our valuation has been prepared on the basis of the improvements being located within the site boundaries and constructed strictly in accordance with the recommended practices, and free from any defect; unless otherwise stated within this report.

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9.0 Market Summary

9.1 Economic Overview

New Zealand has continued its sustained period of economic growth that began back in 2010. New Zealand’s economy grew in line with market expectations in the December 2018 quarter, increasing by 0.6% (2.8% annual average growth). Market expectations are for the economy to continue to grow albeit at a slightly slower rate than in the past.

Supportive monetary policy settings, ongoing growth in government spending on social services and infrastructure, strong population growth and increased construction activity are all supporting ongoing future economic growth. Labour market conditions remain strong in most regions, with low levels of unemployment, and businesses are continuing to report problems employing skilled labour. Despite the tight labour market conditions, household incomes are only increasing at a moderate pace.

The potential impact of external factors on our future economic performance have increased. Increased uncertainty over the future direction of world economic growth, the growing trade conflict between the USA, China and Europe, uncertainty around Brexit, and the simmering uncertainty for countries with high levels of debt and their ability to access financial markets all have the potential to have a local impact.

A number of factors are continuing to support current house prices. Strong population growth, driven in part by net overseas migration gains of 56,000 per annum (March 2019 year), is supporting demand both within our main metropolitan areas and surrounding regions. This continues to run substantially higher than the longer-term average for the cycle. The ten-year average net overseas migration gain now stands at 29,000 people per annum. Other factors continuing to support the housing market includes further falls in mortgage interest rates and the level of construction activity continuing to lag population growth. The recent confirmation the Government will not introduce a capital gains tax or extend the five-year holding period test has also removed some uncertainty from the market. Offsetting these positive factors, banks’ tightening of bank lending criteria, making it harder for purchasers to access credit and poor housing affordability has slowed market growth.

Housing affordability remains a concern in most markets. Recently a number of commercial organisations have started promoting shared equity products for home buyers. The BNZ (YouOwn product owned by Bancorp) and Miuiwi (a co-ownership product connecting first home buyers with shared equity capital investors) have announced they will offer shared equity products to assist first home buyers. These types of products were previously dominated by community housing providers. The objective is to increase, at the margin, the number of households that can affordably purchase a dwelling. Commercial operators’ interest in products like these underpin the concern about the poor levels of housing affordability.

At this stage of the housing cycle, the impact of these changes has been unevenly distributed around the country. Sales volumes have generally fallen in most regions, which can make sales price statistics volatile as a mix of properties sold in any one quarter can change, masking actual movements in value.

9.2 Regional Property Market

Taranaki’s regional economy has experienced low steady growth over the last year with regional GDP increasing by 0.9%. However, Taranaki’s economic confidence fell by 19 percentage points over the last quarter and employment growth outlook also fell by seven percentage points.

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Labour market conditions have also continued to improve with the number of people employed increasing by 5.1% in the 12 months ended March 2019 and the unemployment rate increased from 5.1% in March 2018 to 5.5% in March 2019.

The region’s population increased by 1.3% over the last year. The estimated population growth is in part a result of net overseas migration to the region which totalled 56,000 nationally in the year ended March 2019.

Ongoing population growth combined with improving local economic conditions have had an impact on the local housing market. The volume of houses being built in New Plymouth and the wider Taranaki Region has recovered from the lows experienced in 2011 and 2012. However, the number of residential building consents totalled 455 in the March 2019 year.

Figure 1 presents the trend in the number of sales and median residential property sale prices. The median sale price was $378,000 in the March 2019 quarter. The median sale price up 10% over the last 12 months.

Figure 1: Quarterly residential property sales volumes and median sale prices

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10.0 Valuation Rationale

10.1 Highest and Best Use

The Market Value of an asset will reflect its ‘highest and best use’. The highest and best use is the use of an asset that maximises its potential and that is physically possible, legally permissible and financially feasible. The highest and best use may be for continuation of an asset’s existing use or for some alternative use. This is determined by the use that a market participant would have in mind for the asset when formulating the price that it would be willing to bid.

We consider the highest and best use to be for residential owner occupation.

10.2 Valuation Approaches and Methods

To establish the Market Value of the property, we have utilised Market Approaches as per IVS 105:

+ Comparable Transactions

+ Ranking

+ Depreciated Replacement Cost

10.3 Comparable Transactions

This method involves reference to sales of properties which have similar attributes to the subject property. Comparisons are drawn between the subject property and the sales evidence. Subjective adjustments are applied where necessary to account for factors which have a direct impact on the sale price and value. These include the following:

Land: Location, area, shape, position, aspect, view, contour and standard of surrounding development.

Dwelling: Age, construction, size, number of bedrooms, quality and street presentation.

Site Development: Landscaping, garaging, any additional features.

Recent relevant sales we have considered include (but are not limited to) the following:

Improved Sales

+ 7 Selwyn Street, Lower VogeltownSale Date: 15 April 2019Sale Price: $460,300Building Area: 140 m² (recorded)Land Area: 674 m² (more or less)Comparison: An inferior property due to quality of improvements

and location.Comment: Built during the 1920s, this is a 3 bedroom, 2 bathroom home with a detached

single garage, situated upon a 674 m² site within the Lower Vogeltown locality. Refurbished and well presented.

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+ 91 Mill Road, Lower VogeltownSale Date: 18 May 2019Sale Price: $475,000Building Area: 140 m² (recorded)Land Area: 749 m² (more or less)Comparison: An inferior property due to location, contour, and

walk up access.Comment: Built about 1940, this is a 4 bedroom, 1 bathroom, stucco dwelling with a

detached single garage, situated on a elevated front site. The dwelling has been refurbished to a good modern standard. Walk up access to the dwelling detracts.

+ 286 Carrington Street, VogeltownSale Date: 18 April 2019Sale Price: $475,000Building Area: 127 m² (recorded)Land Area: 509 m² (more or less)Comparison: Inferior due to location.Comment: Built during the 30s/40s, this is a 3 bedroom, 1 bathroom brick and fibre cement

clad home with a detached garage, situated upon a 509 m² site within the Vogeltown locality.

+ 11 Hori Street, VogeltownSale Date: 29 April 2019Sale Price: $477,000Building Area: 150 m² (recorded)Land Area: 809 m² (more or less)Comparison: Inferior due to quality of the dwelling and location

factors.Comment: Built in the 1920's, this is a 3 bedroom, 2 bathroom, weatherboard clad dwelling

with a detached single garage, situated on a front site. Well presented with an upgraded kitchen and décor. The bathroom is dated.

+ 27 List Street, WelbournSale Date: 16 April 2019Sale Price: $525,000Building Area: 131 m² (recorded)Land Area: 728 m² (more or less)Comparison: Overall a slightly inferior property.Comment: Built about 1950's, this is a 3 bedroom, 1 bathroom, weatherboard clad dwelling

with a detached double garage situated on a front site. Kitchen and bathroom upgraded to an average modern standard, well presented.

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+ 5 Mill Road, New PlymouthSale Date: 12 January 2019Sale Price: $540,000Building Area: 136 m² (recorded)Land Area: 924 m² (more or less)Comparison: Less desirable location however larger land area

and superior presentation. Overall a comparable property on a value basis.

Comment: Built about 1925, this is a 3 bedroom, 1 bathroom, weatherboard clad dwelling with a detached double garage and timber deck, situated on a front site. Fixtures and fittings have been upgraded to an average modern quality. Landscaping is of an attractive standard.

+ 18 Bracken Street, New PlymouthSale Date: 24 April 2019Sale Price: $553,500Building Area: 110 m² (recorded)Land Area: 761 m² (more or less)Comparison: Overall a comparable property.Comment: Built in the early 1900's, this is a 3 bedroom, 1 bathroom, weatherboard clad

dwelling with a detached single garage, situated on a front site. Well presented with being fully refurbished to an average modern standard. Walk up access detracts.

+ 211 Powderham Street, New PlymouthSale Date: 1 June 2019Sale Price: $565,000Building Area: 135 m² (recorded)Land Area: 454 m² (more or less)Comparison: Slightly superior due to presentation and garaging

factors.Comment: Built about 1955 but since refurbished, this is a well presented 3 bedroom, 1

bathroom, roughcast clad home with a detached double garage, situated upon a 454 m² site within central New Plymouth. Short walk up access, elevated outlook including a glimpse of the sea. Kitchen and bathroom upgraded to an average modern standard.

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+ 5 Holsworthy Road, Lower VogeltownSale Date: 17 June 2019Sale Price: $620,000Building Area: 130 m² (recorded)Land Area: 634 m² (more or less)Comparison: Located nearby the subject however is considered

to be superior due to quality of internal amenities, presentation, and garaging factors.

Comment: Built in 1930's, this is a well presented 3 bedroom, 1 bathroom character dwelling with a detached double garage and timber deck, situated on a front site. The dwelling has been fully refurbished to an average modern standard while retaining much of it's historic character.

Reconciliation of Sales Evidence

Address Date Price Site Area Floor Area Bdrms Comparability

Improved Sales

7 Selwyn Street 15 April 2019 $460,300 674 m² 140 m² 3 Inferior

91 Mill Road 18 May 2019 $475,000 749 m² 140 m² 4 Inferior

286 Carrington Street 18 April 2019 $475,000 509 m² 127 m² 3 Inferior

11 Hori Street 29 April 2019 $477,000 809 m² 150 m² 3 Inferior

27 List Street 16 April 2019 $525,000 728 m² 131 m² 3 Slightly inferior

5 Mill Road 12 January 2019 $540,000 924 m² 136 m² 3 Comparable

18 Bracken Street 24 April 2019 $553,500 761 m² 110 m² 3 Comparable

211 Powderham Street 1 June 2019 $565,000 454 m² 135 m² 3 Slightly superior

5 Holsworthy Road 17 June 2019 $620,000 634 m² 130 m² 3 Superior

This is a 3-4 bedroom home situated within a sought after location in New Plymouth. There is a single attached carport and a good outdoor living area. Decoration is tidy and the kitchen amenities have been upgraded to an average modern standard. The bathroom is slightly dated.

We have compared sales within Lower Vogeltown and other areas around central New Plymouth. Of the above sales, those below $530,000 are considered to be inferior to the subject due to location and/or the quality of improvements. 211 Powderham is considered to be slightly superior due to being recently redecorated and has better garaging. 5 Holsworthy Road is located across the road from the subject however is superior to the subject due to presentation, character, has a larger yard area, and better garaging. After analysing the sales, they give an indicated value range of $530,000 to $550,000.

Based on our analysis of the sales, we have concluded an indicated Market Value of $540,000.

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10.4 Ranking

Under this method, the comparable sales are ranked in order from inferior to superior. The subject property is then fitted into the ranking order to establish the value parameters.

The range of value indicated under this approach is $530,000 to $550,000. With due regard for all factors associated with the subject property, we have adopted an indicated Market Value of $540,000.

10.5 Depreciated Replacement Cost

The Cost Approach provides an indication of value on the economic principle that a buyer will pay no more for an asset than the cost to obtain an asset of equal utility, whether by purchase or construction.

Under this approach we began by establishing the cost to replace the improvements with their modern equivalent having regard to current building costings (including fees). We then deduct an allowance for market depreciation. To the value of improvements we add our estimate of the market value of the land as analysed from sales.

The depreciated replacement cost assessment is summarised as follows:

Land Value $370,000

Dwelling (less market depreciation) $137,000

Other Improvements $15,000

Other Buildings $5,000

Total Improvements $157,000

Chattels $8,000

Indicated Market Value $535,000

10.6 Valuation Summary and Reconciliation

Methods Value

Comparable Transactions $540,000Ranking $540,000Depreciated Replacement Cost $535,000

Market Value - Adopt $540,000

The approaches show a close correlation, however the most reliable method for establishing Market Value is by direct market comparison as this reflects existing market conditions and movement. Accordingly, we have placed most weight upon this approach.

10.7 Previous Sale

None within the last three years.

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11.0 Valuation

11.1 Valuation Assessment

We assess the Market Value as at 16 July 2019 at:

$540,000Five Hundred and Forty Thousand Dollars including GST (if any).

The value can be apportioned as follows:

Land $370,000Improvements $162,000Chattels $8,000Market Value $540,000

11.2 Reasonable Selling Period

The valuation is based on a normal selling period of up to 3 months for this location.

11.3 Current Contract

The property is not on the market.

12.0 Significant Assumptions and Special Assumptions

Nil

TelferYoung policy requires that reports cannot be reassigned for any purpose beyond 90 days from the date of valuation. This policy has been set to meet professional indemnity insurance requirements. It is a condition of this report that any valuation needing to be reassigned beyond 90 days may require re-inspection by the valuer with an update fee charged.

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13.0 Risk Analysis

This Risk Analysis reflects the current impact on the subject property of a number of specific factors. Eight factors are considered, four property specific aspects and four market related aspects. Each individual Risk Rating is determined by considering a factor (such as Location or the Local Economy) and the effect that may have on the subject property’s value and marketability. Lower Risk Ratings are an indication of a property that should perform well in the market place. However a higher Risk Rating may indicate a property that, in comparison with other similar properties, may be inferior in terms of value stability and marketability.

A numerical Risk Rating is provided for each factor and has been graphed as follows:

Property Risk Rating* 1 2 3 4 5 Market Risk Rating* 1 2 3 4 5

+ Location/Neighbourhood 1 + Recent Market Direction 2+ Land (inc. planning & title) 2 + Market Volatility 1+ Environmental Issues 2 + Local Economy Impact 1+ Improvements 2 + Market Segment Conditions 2

*Risk Ratings: 1 = Low, 2 = Low to Medium, 3 = Medium, 4 = Medium to High, 5 = High

A Risk Rating of 1–2 is an indication of no aspect warranting comment. Risk Ratings of 3–4 are an indication of an adverse aspect that is detailed below. A Risk Rating of 5 indicates an adverse aspect that could have a major impact on value and/or marketability. Risk Ratings are a subjective indicator only and should not be relied upon alone when purchasing or lending.

Property Risk OverviewThe property is considered to have an average risk profile in comparison with other residential properties in the locality.

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14.0 Statement of Limiting Conditions and Valuation Policy Purpose

This valuation report has been completed for the specific purpose stated. No responsibility is accepted in the event that this report is used for any other purpose.

Responsibility to Third Party

Our responsibility in connection with this valuation is limited to the client to whom the report is addressed and to that client only. We disclaim all responsibility and will accept no liability to any other party without first obtaining the written consent of TelferYoung (Taranaki) Limited and the author of the report. TelferYoung (Taranaki) Limited reserves the right to alter, amend, explain or limit any further information given to any other party.

Reproduction of Report

Neither the whole nor any part of this valuation and report or any reference to it may be included in any published document, circular or statement without first obtaining our written approval of the form and context in which it may appear. Our report is only valid when bearing the Valuer’s signature.

Date of Valuation

Unless otherwise stated, the effective date of the valuation is the date of the inspection of the property. This valuation is current as at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period (including as a result of general market movements or factors specific to the particular property). We do not accept liability for losses arising from such subsequent changes in value.

Without limiting the generality of the above comment, we do not assume any responsibility or accept any liability where this valuation is relied upon after the expiration of 3 months from the date of the valuation, or such earlier date if you become aware of any factors that have any effect on the valuation.

Legislation

We have not obtained a Land Information Memorandum (LIM) or Property Information Memorandum (PIM) for this property which, unless otherwise stated, is assumed to conform to all requirements of the Resource Management Act 1991, the New Zealand Building Code contained in the First Schedule to the Building Regulations 1992, the Building Act 2004 and any Historic Places Trust registration. Our valuation reports are prepared on the basis that properties comply with all relevant legislation and regulations and that there is no adverse or beneficial information recorded on the Territorial Local Authority (TLA) property file, unless otherwise stated. Legislation that may be of importance in this regard includes the Health & Safety at Work Act 2015, the Fire Safety and Evacuation of Buildings Regulation 1992, and the Disabled Persons Community Welfare Act 1975.

Registrations

Unless otherwise stated, our valuation is subject to there being no detrimental or beneficial registrations affecting the value of the property other than those appearing on the title. Such registrations may include Waahi Tapu and Heritage New Zealand registrations.

Reliability of Data

The data and statistical information contained herein was gathered for valuation purposes from reliable, commonly utilised industry sources. Whilst we have endeavoured to ensure that the data and information is correct, in many cases, we cannot specifically verify the information at source and therefore cannot guarantee its accuracy.

Assumptions

This report contains assumptions believed to be fair and reasonable at the date of valuation. In the event that assumptions are made, based on information relied upon which is later proven to be incorrect, or known by the recipient to be incorrect at the date of reporting, TelferYoung (Taranaki) Limited reserves the right to reconsider the report, and if necessary, reassess values.

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GST

The available sources of sales data upon which our valuation is based generally do not identify whether or not a sale price is inclusive or exclusive of GST. Unless it has been necessary and possible to specifically verify the GST status of a particular sale, it has been assumed that available sale price data has been transacted on a GST inclusive (if any) basis, which is in accordance with standard industry practice for most residential property. Should this interpretation not be correct for any particular sale or rental used as evidence, we reserve the right to reconsider our valuation.

Land Survey

We have made no survey of the subject property and assume no responsibility in connection with these matters. Unless otherwise stated, the valuation has been assessed conditional upon all improvements being within the title boundaries.

Unless otherwise stated, we have not undertaken investigations or been supplied with geotechnical reports with respect to the nature of the underlying land. Unless otherwise stated, the valuation has been assessed conditional upon the land being firm and suitable ground for the existing and/or potential development, without the need for additional and expensive foundation and retaining work or drainage systems.

Contamination

We have not undertaken an environmental audit of the property. Unless otherwise stated, our valuation and report is conditional upon the land and buildings being unaffected by harmful contaminants or noxious materials which may impact on value. Verification that the property is free from contamination and has not been affected by noxious materials should be obtained from a suitably qualified environmental expert.

Not a Structural Survey

Our inspection has been undertaken for valuation purposes only, and does not constitute a structural survey. Verification that the building is sound should be obtained from a suitably qualified building engineer. If the building is found to be unsound, this finding/new information is likely to impact on the value of the property.

Earthquake-Prone Buildings

We are aware that a number of buildings are, or may be potentially, affected by local territorial authority policies for 'earthquake-prone' buildings (Earthquake-Prone Building Policies) required to be in place under the Building Act 2004. The Earthquake-Prone Building Policies may require building owners to undertake engineering investigations and subsequent structural upgrading, demolition or other steps to meet the requirements of the Earthquake-Prone Building Policies. Unless otherwise stated, our valuation makes no allowance for any costs of investigation, upgrading, demolition or other steps which may be incurred by the building owner to meet the requirements of Earthquake Prone Building Policies. We are not qualified to determine the 'earthquake-prone' status of the buildings. Our valuation is therefore subject to a review, investigation and assessment of seismic performance of the building, by a suitably qualified building engineer, to determine the 'earthquake-prone' status of the building and where required, an estimate of any costs for structural upgrading, demolition or other steps required for the building to meet the requirements of Earthquake-Prone Building Policies. If the building is found to be 'earthquake-prone', this finding is likely to impact on the value of the property, and our valuation may materially alter as a result.

Systems

Our valuation has been assessed conditional upon all hot and cold water systems, electric systems, ventilating systems and other devices, fittings, installations or conveniences, including lifts and escalators where appropriate, as are in the building, being in proper working order and functioning for the purposes for which they were designed.

Market Valuations

Market valuations are carried out in accordance with the Valuation Standards and Guidance Notes. Market Value is defined “The estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties have each acted knowledgeably, prudently and without compulsion”.

No allowances are made in our valuations for any expenses of realisation, or to reflect the balance of any outstanding mortgages either in respect of capital or interest accrued thereon.

25


Water Leaks & Penetration Effects

We are aware that a number of buildings have developed problems associated with water leaks, water penetration, weather-proofing, moisture and water exit control systems, mould, fungi, mildew, rot, decay, gradual deterioration, microorganisms, bacteria, protozoa or like forms. Problems can result from defects in design, construction methods and materials used, or any combination of defects.

Our valuation has been assessed conditional upon all buildings and structures being constructed strictly in accordance with recommended practices and free from defect unless otherwise stated. We are not qualified to undertake, nor have we undertaken, a structural survey of the buildings or structures. We accept no liability for any defects that may arise as a result of poor building design, construction methods or building materials. If you have any concerns, you should engage a suitably qualified person to report on this matter. Defects revealed by a suitably qualified expert may affect the value of the property.

Risk Analysis

The Risk Analysis is a simplified analysis based on the current experience and knowledge of the Valuer and is not a technical analysis. Those relying on the valuation cannot expect that the Valuer brings to the task any greater level of common knowledge or ability to foresee events than can be expected of persons experienced in the market for that class of property in its market place (which may be local or broader). The risk analysis is the product of the current experience of the Valuer based on information that is common knowledge and/or readily ascertainable in the market for that class of property in its market place. The risk analysis does not reflect information that is privileged or to which the market for that class of property in its market place does not have ready access and it does not reflect decisions, announcements, releases, articles and the like that the Valuer has not had reasonable time and opportunity to assess and consider, or would in the ordinary course of acting as a valuer become aware of or have access to. Subject to these limitations, the risk analysis indicates the level of adverse impact each stated aspect has on the subject property’s value and marketability as at the date of valuation.

Professional Indemnity Cover

We have in force at the time of supplying the above valuation, current professional negligence insurance appropriate to the nature and level of our business activities. The Registered Valuer is covered by the policy.

Valuer's Statement

This report has been undertaken by Kieran Glentworth under the supervision of Kelvin Gifford who has inspected the property and reviewed the report, methodology and workings. Both valuers have inspected the property externally and internally. The Registered Valuer holds an Annual Practicing Certificate.

Please contact the writer should you wish to discuss any matters raised in this report.

Yours faithfully


Kieran Glentworth - B Ag Com (RVM) Valuer

Email: [email protected]

Kelvin Gifford - BBS (VPM); ANZIV; SPINZRegistered Valuer

Email: [email protected]


Appendix ARecord of Title


Appendix BAdditional Photographs


Lounge Kitchen

Bathroom Outdoor living area

Area requiring repainting

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