Nasty rates shock for booming suburbs
Buoyant house prices in the city’s northeast could lead to a nasty rates shock for Hamilton homeowners.
Ratepayers reeling from a city council proposal to have two years of 9.5 per cent rates hikes could be in for further pain when property revaluations are released.
The revaluations are completed every three years and help determine homeowners’ share of the city’s rates.
Letters will be sent to ratepayers in November but one property expert predicts the new valuations could place a further squeeze on household budgets.
The total rates collected by the city council doesn’t change as a result of the revaluation process but the portion of what each ratepayer pays could change depending if their property increases in value more or less than the average.
Property consultant Colin Jones said property values in parts of Hamilton’s northeast had risen at a faster rate than the city’s average.
‘‘If everyone’s house price goes up by the same percentage then, theoretically, everyone’s rates should stay the same, relative to each other,’’ Jones said.
‘‘But house prices in suburbs like Huntington, for example, have taken off much faster than, say, Nawton and therefore rates in Huntington should go up much faster.
‘‘There are going to be ratepayers hit by the revaluation on top of the 9.5 per cent rates increases. But until the revaluations come out, we don’t know exactly which suburbs are going to be worse or better off.’’
Lodge Real Estate managing director Jeremy O’Rourke said city house prices had risen significantly since 2015.
Agents were now seeing a substantial difference between the rateable value of properties and sale prices.
‘‘Three years ago the city’s median house price was in the high $300,000s to early $400,000s and today it’s well into the $500,000s,’’ O’Rourke said.
‘‘In general, when you’re measuring over time, we’ve seen pretty much all ships lift with the tide. The only one that stands out is the northeast that has risen substantially. The Flagstaff and Rototuna areas are the only sector of the city that could potentially have outstripped the rest of the market.’’
Hamilton Mayor Andrew King said although house prices had increased more in dollar value in the city’s northeast, the price rise would be similar to other suburbs in percentage terms.
‘‘There will be some areas that will go up more than others but there shouldn’t be substantial movement because we know everybody’s properties over the last three years has increased.
‘‘I’m quite sure houses in Nawton and Frankton and Fairfield have moved up substantially in value and I’m sure we’ll see the percentage as being very similar to perhaps more expensive properties.’’
Harcourts Hamilton general manager Brian King expects the revaluation to show a significant lift in property prices across the city.
‘‘One year ago you couldn’t build a house on a land package for what you could buy one for. So, as building costs go up, existing house prices will go up.’’
King said the city’s northeast had experienced ‘‘very healthy’’ increases against a backdrop of buoyant house prices citywide.
‘‘I don’t want to pick out any one suburb but certainly the northeast has had strong price increases.’’
The citywide revaluation process will be completed by Quotable Value (QV).
Homeowners can lodge an objection to their property valuation from November through to mid-January.
Information on how to lodge an objection will be included with the valuation notice.