Bigger proportional increases in house prices in some areas of South and West Auckland such as Māngere may make them eligible to cover more of the city's rates. Photo: Flickr/itravelNZ

Property revaluations released today show standalone homeowners in some of Auckland’s less affluent areas will be hit hardest by increases in rates

Soaring house prices in Auckland have not overlooked lower socio-economic areas like Māngere or Ōtāhuhu. But as Auckland Council gears up to release its last revaluation of property values, higher prices in lower-income suburbs may see them paying a greater share of the city’s rates.

According to property valuations being released today by Auckland Council after a two-year deferment due to the uncertainties of Covid-19, areas with the highest increases include Māngere, Ōtāhuhu and Henderson.

Te revaluation will determine rates across the city, with areas above average increases in value expected to find themselves paying more.

While homeowners in these suburbs may have more equity, it may also signal a rates hike that could disproportionately affects residents of some of the city’s poorer quarters.

It’s just another thing making life hard for families, said Dave Letele, health and fitness advocate and founder of BBM Motivation. He’s seen the toll rising living costs have had on families while running a food bank out of his South Auckland headquarters.

“We’re seeing the struggle day to day,” he said. “Stuff like this affects the bottom line of families. What it comes down to is it’s less food, it’s less petrol, it’s less school uniforms, less school books.”

He’s seen an “immeasurable” increase in people needing help since the beginning of the Omicron outbreak. Inflation and the financial pressures of being two years into the global pandemic have hit communities in the area hard.

“We already have no money, we’re already barely getting by day to day,” Letele said. “So now if we’re going to have to pay more rates on top of everything else that’s increasing for us, where do they expect that to come from. Where it comes from is food for our families.”

According to Auckland Council, the high average increases in these areas have been caused by intensification in recent years. On top of this, standalone dwellings have increased in value more than apartments and flats. This means wealthier areas with more apartments, such as the CBD and inner-city fringe, are likely to see lower rates increases in general.

However, increase in property values doesn’t automatically lead to increased rates. Rather, rates increases will follow if a property has increased more than the average for the same property type across the city.

Therefore, areas with above-average increases are likely to see increases, while places whose values have increased less than the average may see reductions.

The area with the highest increases in value was Aotea Great Barrier, although Auckland Council group treasurer John Bishop explained it is still one of the lowest valued areas in the region.

Meanwhile, the areas with the lowest increases were Waitematā in the central city and Hibiscus and Bays on the North Shore.

The relatively wealthy suburb of Millwater could expect to pay less rates due to proportionately smaller increases in house values since 2017. Photo: John Sefton

The fallout of this is a potential rates cut for these wealthier environs, and more of the bill going to families south of the Māngere Bridge.

Rather than the sum total of rates collected going up, the revaluation is intended to redistribute rates in what the council sees as fair.

But for the communities of South Auckland, higher rates due to skyrocketing house prices or landlords passing rates increases down to tenants may not feel particularly fair.

Letele wants to see politicians and people making the decisions head down to the food bank and meet some of the families he’s giving a lifeline to.

“Bubbles existed long before Covid,” he said. “It’s when people at the top have absolutely no idea what’s it like for people down at the bottom.”

Auckland Mayor Phil Goff has previously minimised the effect rates increases may have on South Auckland, saying a higher percentage of people in the area are renters – either private landlords or Kāinga Ora – and will therefore be less affected by rates hikes.

Letele is incredulous: “100 percent it’s going to be passed down to the renter.”

And on top of that, just because you own your own home doesn’t preclude you from the struggle.

Letele reported a lot of working class people coming through the food bank who hadn’t found themselves in such dire financial straits before.

“You’ve got your whole level of people in the working class who are now struggling, and a lot of the time those people aren’t used to struggling like what they are going through now and it can be very scary,” he said.

Councils are obligated to revalue all of the properties in their region every three years. The last revaluation occurred in 2017 so, due to Covid-19, this round has been a long time coming.

Individual property data is expected to be available from today on the Council’s website, with property owners receiving valuation notices in the mail with information on how to object to the revalued figure.

Matthew Scott covers immigration, urban development and Auckland issues.

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