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Auckland ratepayers to receive new rating valuations
Auckland ratepayers to receive new rating valuations

1News

time3 hours ago

  • Business
  • 1News

Auckland ratepayers to receive new rating valuations

Auckland ratepayers will receive new property valuations tomorrow, showing an average 9% drop in residential capital valuations. It comes as the council prepares to roll out a 5.8% average rates increase from July. The new rating valuations, based on property market trends in May 2024, show variations across property types and locations throughout the region, with industrial, lifestyle, and rural properties bucking the downward valuation trend. Auckland Council chief financial officer Ross Tucker said the valuations reflect the economic downturn since the previous valuations in June 2021. "As we know, the last council valuations from June 1, 2021 were completed close to the market peak and between then and May 2024 the economy and property market generally trended down," he said in a media release ADVERTISEMENT "Therefore, as most people would expect, the May 2024 capital values (CVs) are lower than the previous 2021 CVs for many properties." An old house with a view of Auckland's city centre skyline (file image). (Source: The new valuations are not intended to accurately reflect current market value. Instead, they're used to determine how the city's rates burden is shared among property owners, with those whose properties decreased in value less than the 9% average likely to face higher-than-average rate increases. "If your residential property value has reduced more than the average (-9%) change between the two valuations, you can expect a smaller rates increase than the 5.8%." The overall capital value movements between the 2021 and 2024 valuations show industrial properties increased 5%, while commercial properties fell 5%. Lifestyle and rural properties both increased by 4%, while residential properties dropped by 9% on average. ADVERTISEMENT Properties closer to Auckland's central business district generally experienced larger value decreases, with Albert-Eden, Maungakiekie-Tāmaki, Waitematā, Whau and Puketāpapa areas all seeing drops of 13 to 14%. Auckland Council building (file image). (Source: 1News) But, values in areas further from the city centre held up better, with Hibiscus and Bays, Upper Harbour and Franklin experiencing smaller decreases between 1 and 4%. Auckland Council chief economist Gary Blick explained the context behind the shifts. "At the time of the 2021 rating valuation in June 2021, the official cash rate had been at an all-time low," he said. "We saw exceptionally low mortgage rates and strong upward pressure on property prices. The 2021 rating valuation reflected those higher prices. "In contrast, the 2024 rating valuation in May 2024, occurred when the OCR had been lifted to its recent high of 5.5%. Higher interest rates cooled buyer demand, leading to a decline in property prices. ADVERTISEMENT "Despite that fall, the median house price as at May 2024 was still above the level just prior to the OCR cut of March 2020, and that remains the case today. "The recent economic cycle – with its unusually steep climb and fall – helps explain why some properties have had swings between the two rating valuations." Tucker said most Auckland ratepayers will see some degree of rates increase from July 1, with the average annual rates for a residential property valued at $1.29 million set to be $4069 – an increase of $223 per year or about $4.30 weekly. The valuations do not change how much the council takes in rates, as this is set annually following community consultation. For the upcoming financial year, Auckland Council has approved an overall average rates increase of 5.8% for residential ratepayers. The new valuations will be available on the Auckland Council website from tomorrow, with formal notices to be posted or emailed from Friday.

How Auckland ratepayers can learn their new property valuations
How Auckland ratepayers can learn their new property valuations

RNZ News

time14 hours ago

  • Business
  • RNZ News

How Auckland ratepayers can learn their new property valuations

An aerial view of an Auckland suburb showing many blocks of housing. Photo: RNZ / Kate Newton Auckland ratepayers can learn their new property valuations this week. Auckland Council will release the rating valuations for Auckland's 630,000 properties online from Tuesday, while ratepayers will be sent formal notices from Friday. Monday's valuation data showed residential values have fallen nine percent since the last CVs were unveiled in 2021. Auckland Council chief financial officer Ross Tucker said the rating valuations are based on property market trends and recent sales activity as at 1 May, 2024. "As we know, the last council valuations from 1 June, 2021 were completed close to the market peak and between then and May 2024 the economy and property market generally trended down. "Therefore, as most people would expect, the May 2024 Capital Values (CVs) are lower than the previous 2021 CVs for many properties," Tucker said. He said for 2025/2026, Auckland Council has approved an overall average rates increase of 5.8 percent for residential ratepayers This means annual rates for an average residential property (CV $1.29 million) will be $4,069. The 5.8 percent average increase for 2025/2026 will equate to $223 per year or around $4.30 per week. "We are acutely aware of the tough cost of living facing our community and we continue to work hard to achieve council savings and improve value for ratepayers, to help keep rates as low as possible," Tucker said. "Most Auckland ratepayers will see some degree of rates increase from 1 July, 2025. However, how a residential property's CV changes compares to other properties in the region will generally determine whether that property's rates increase from 1 July is more, or less, than the 5.8 percent average. "If your residential property value has reduced more than the average (-9 percent) change between the two valuations, you can expect a smaller rates increase than the 5.8 percent. Conversely, if your property value held up better than the average, then you can expect a larger rates increase." During Monday's media briefing, Auckland Council said residential properties in centrally located local board areas tended to see a bigger reduction than those further out, particularly apartment dwellings which had fallen 12 percent. Properties closer to the city centre by in large had above-average reductions like Puketāpapa, Albert-Eden, Maungakiekie-Tāmaki, Waitematā and Whau (all -14 or -13 percent). Auckland Council said this could be influenced by the varied market, including apartments, multi-units and stand-alone homes, which all have different sales trends. For many residential properties, land values had fallen an average of -13 percent and commercial land is also down -6 percent. The reduction in land values reflects reduced development activity since 2021 and, in some cases, potential zoning changes. Reduced demand for properties with redevelopment potential contributed to larger value declines in areas like Māngere, Henderson, Massey, Glen Innes, Point England and Panmure. Values for areas further from the city centre held up slightly better with Hibiscus & Bays, Upper Harbour and Franklin ranging from -4 percent to -1 percent. Commercial values were also down 5 percent, while lifestyle and rural increased by 4 percent, industrial was also up 5 percent. Council said it was also difficult to quantify the overall effect of the 2023 Auckland flooding event on the market due to the number of variables involved. Despite that, data shows that values in Muriwai increased by 12 percent while values in Henderson fell by 10 percent. Rodney held its values (average 0 percent change) and Aotea Great Barrier is up (+38 percent) which Auckland Council said is a continuing trend, with residential values on Aotea Great Barrier up 59 percent at the 2021 revaluation. Auckland Council chief economist Gary Blick said it was important to highlight that the previous two Auckland rating valuations coincided with markedly different stages of the recent economic cycle. "At the time of the 2021 rating valuation, in June 2021, the Official Cash Rate (OCR) had been at an all-time low," says Mr Blick. "We saw exceptionally low mortgage rates and strong upward pressure on property prices. The 2021 rating valuation reflected those higher prices. "In contrast, the 2024 rating valuation in May 2024, occurred when the OCR had been lifted to its recent high of 5.5 per cent. Higher interest rates cooled buyer demand, leading to a decline in property prices. "Despite that fall, the median house price as at May 2024 was still above the level just prior to the OCR cut of March 2020, and that remains the case today. The recent economic cycle - with its unusually steep climb and fall - helps explain why some properties have had swings between the two rating valuations." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.

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