Pensioner, 85, looking for flatmates as insurance and rates cut deep
Robert Oliver worked long past the age many retire but now in his golden years is looking for flatmates as insurance and rates cut deep.
Oliver, 85, lives in Roseneath with views over Wellington Harbour.
His rates are currently $8805. Later this year they will go to $9793. On Wellington City Council projections, they will break the $20,000 mark at the end of the 203031 year and, and in 10 years they will reach $27,032.
He gets a 50% rates discount from the council but, once other costs such as insurance come out, the house he and his wife paid £6000 for in 1966 ($287,000 in 2024 dollars), costs him $300 to $400 a week to run. It has a rateable value well north of $2 million.
The soaring projected rates are not unique to Wellington City.
The Ratepayers’ Report says the average Upper Hutt average household pays $2176 in rates now but council projections show that will jump to $5150 by 2034. However, the Upper Hutt City Council said there were too many variables to confirm this. Down the road, an average Hutt City house now paying $3348 will pay $9781 (again, variables notwithstanding).
An average Kāpiti Coast District Council rates bill will jump from $3263 to $7018, while in Porirua City it will go from $4350 to $8921.
There are other factors at play. Houses can go up and down in value and a lower value, compared with other properties, will reduce increases. Inflation will likely rise, meaning rates are relatively less as workers earn more. But for those on a fixed income, any increases in superannuation are unlikely to counter the rates increases.
The summer just been, where all of Wellington except Kāpiti faced the real chance of taps running dry, shone the spotlight on how decades of underinvestment in all water pipes – drinking, waste, and storm – which now need urgent and costly fixes. It is estimated that at least $30 billion is needed to fix the region’s pipes.
On top of that, councils, like its residents, are facing across-the-board cost increases from everything from insurance to labour.
A new planned water-entity covering the lower North Island is being formed in the hope it will be able to borrow money for pipe repairs, paid back over decades, so lessening future rates rises.
Oliver doesn’t bemoan the rising rates – “they have to go up” – though does question them being based on a “notional” land value taken at the market peak.
Selling up the house he and his wife brought his three children up in, and expanded as they needed their own rooms, is not an option. Trees he planted in the rambling garden are now fully grown. “I just can’t think of not being here,” he said.
So at 85, and now a widower, and five years out of leaving his job running music for Wellington church St Mary of the Angels, he is looking for flatmates.
It is something he has done before but this time it is a financial decision to let him stay in his house.
He had a few people already come and check it out but, so far, no takers. It seemed most people wanted to flat with people their own age. One decided against it because he wanted a “modern vibe”.
Wellington mayor Tory Whanau reminded others in similar situations that the council had a rates rebate scheme for eligible people.
“I know that many in our community are doing it tough at the moment because of the cost of living, high interest rates and high insurance rates,” she said.
“This budget has had to strike a tricky balance between keeping rates manageable for households and investing to fix some long-standing problems such as water.
Over half of the rates increase proposed in this long-term plan is going to fix water.”
Grey Power acting president David Marshall said retired renters were doing it toughest but, for many of those who owned their own home but had little cash, options were limited to getting flatmates or weekly trips to the food bank.
Selling up and downsizing was an option but banks wouldn’t offer bridging finance to those who relied on superannuation.
This left older people who were having to sell up then often unable to find a new home in their community and having to move elsewhere, where they had no support.
Rates postponement – where rates are paid after a house is sold, usually after death – was unpalatable for some but an option. A 2023 Retirement Commission report showed this was offered specifically for seniors in about a third of councils.
Wellington City offers a general rates postponement, albeit not specifically targeted to seniors, and is described as a “last resort” for people in financial hardship beyond their control, and applied for “after all other avenues to meet rates commitments have been exhausted”.
Age Concern chief executive Karen Jansen-Billings said rising costs meant older people would cut down on food or miss going out to meet friends, worsening social isolation. “If you are on a fixed income, you can either find more money or reduce expenses.”
New Zealand superannuation worked on the assumption that people lived in mortgage-free homes but the reality for many that they still had to pay mortgages or rates.
Recent figures showed that 61% people of superannuation age were still in work due to the rising cost of living.
Meanwhile, a recent Quashed online insurance comparison showed average contents and house insurance quotes had increased 13% compared with a year ago while Tower Insurance chief executive Blair Turnbull warned rising costs mean people would have to cut costs by reducing what they insured for.
Insurance Council chief executive Kris Faafoi said a numbers of factors were pushing insurance up high building cost inflation, rising global reinsurance rates and the impact of last year’s severe weather events.
Insurers were looking at ways to help people get cover they needed as cost-effectively as possible. “We know that New Zealanders are doing it tough with the cost of living and insurance is part of that mix.”