Revaluations don't mean more money for the council, but 'upzoned' properties gain extra value in Auckland.

Don't be fooled: revaluation doesn't mean the council collects more money from rates.
The new Auckland Council revaluations have seen a significant rise in rateable value – with the total value of all residential properties across the region increasing by 46 per cent, with an average property (rateable) value of $1.076 million.

The council has been quick to help homeowners understand that, even if a property's value has risen by a large amount, it does not mean rates will rise by the same amount – or at all.

"Rises in property value do not impact the total amount of rates collected by the council; other factors are involved," Says Debbie Acott, Head of Rates, Valuations and Data Management at Auckland Council.

"That's because revaluation is a tool used to help work out everyone's share of rates based on a property's value, which is calculated as a proportion of the value of all property in Auckland.

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"The amount of money collected by the council is influenced by other factors that get worked through the council budgeting process each year, such as targeted rates or the number of additional rateable properties built in the previous year," she says.

For many Auckland properties whose rateable value has risen by less than, or not much more than, the 45 per cent average across the region, rates decreases or minimal increases are likely to apply when they are levied in July 1, 2018.

Meanwhile, Auckland has a new category of homeowners: "Upzoners".

They are the householders whose properties have been rezoned in line with the Unitary Plan's zoning provisions – allowing Aucklanders to build a larger number of dwellings on certain properties to ease the housing shortage – and who will notice the biggest increase in values when they come to sell.

David Norman, Auckland Council's chief economist, says an exhaustive study by his team covering 110,000 house sales across the region in the last six years, shows "upzoners" have gained an extra $34,000 in value, on average, across the Auckland region than a property not zoned for increased density in the Unitary Plan.

"It differs from place to place, of course, and our study took into account factors like location, distance from the CBD, distance from the water, floor area and the size of the land as we looked closely at different areas around Auckland."

It also demonstrates that two houses in the same neighbourhood, even right next to each other, could have different values if one is "upzoned" for building townhouses, for example, while the other is not.

The study shows the most densely upzoned areas of the Auckland isthmus (Glen Innes, Mt Wellington, Onehunga, Mt Roskill and Pt Chevalier) sold on average for a premium of more than $90,000 compared to neighbouring properties not upzoned.

"It differs from suburb to suburb," Norman says. "In Glen Innes and Mt Wellington, for example, the premium was $80,000 while in the densely upzoned area near Mt Roskill and Sandringham, the premium was almost $150,000. The biggest extra value revealed by the study was $250,000 in Glendowie and St Heliers."

Inner city suburbs (excluding the CBD) have an upzoning average premium of $77,000 while, across the Auckland isthmus, the average premium was $50,000, falling to $34,000 once values across the entire Auckland region are averaged out.

Outside the isthmus, New Lynn ($40,000) and Otahuhu ($94,000) are areas where upzoning has added value to properties. In all areas further away, there was no upzoning premium except for Botany ($60,000 in 2016).

"The message is clear," says Norman. "Upzoning adds more value to properties closer to the CBD (and closer to work opportunities) than to properties further away.
"However homeowners should remember that the primary use of the revaluation is to work out everyone's share of rates. They don't represent current market value, and are just a snapshot in time."

For more information about revaluation, visit aucklandcouncil.govt.nz/revaluation