Tauranga property values have risen 48 per cent since 2015 according to new council valuations that will impact how much rates each homeowner will pay over the next three years.
Skyrocketing home values in Mount Maunganui have put ratepayers in the beach suburb first in line to pay a bigger portion of the city's rates bill.
The Tauranga City Council has finished the revaluation process it must do every three years by law.
It found an average value increase of 48 per cent, with the average residential property worth another $237,000 since the last revaluation in 2015, while the median commercial property was up by $227,000.
Tauranga property values
Average residential value 2015: $493,000
Average residential value 2018: $730,000
Median commercial value 2015: $843,000
Median commercial value 2018: $1,070,000
Source: Tauranga City Council
Yesterday the council began sending letters to homeowners informing them of their new valuation, which they will have until January 25 to challenge. They will apply from July 1.
Mark Grinlinton, a managing valuer with Opteon, the company the council contracted to do the revaluation, said the new values were calculated by analysing sales data.
He said the general trend across Tauranga was for suburbs with traditionally cheaper properties - Judea, Greerton, Gate Pā, Hairini, Maungatapu - to see the steepest increases.
Mount Maunganui bucked that trend, he said, by starting out with some of the city's most expensive property and still achieving the steepest average value increases.
In Mount Maunganui North, values rose by 57 per cent, setting a record average of $1.3 million - a figure possibly swayed by an increase in multimillion-dollar sales.
Meanwhile, The Lakes saw the smallest increase at 30 per cent, which Grinlinton said represented a flattening off, of sorts, of values inflated by the number of new builds in 2015.
The council's chief financial officer, Paul Davidson, said the biggest misconception about revaluations was they automatically meant a rates increase.
Because the amount of rates the council needed to run the city was split among ratepayers on a proportional basis, calculated by property value, the rates impact would depend on how far a value change was from the average change.
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"If everyone went up by the same amount, there would be no change to anyone's rates."
For example, if this year's rates were recalculated, the average Lakes ratepayer would have $129 shaved off their bill, and the average Mount Maunganui North ratepayer would pay an extra $142.
Mount Maunganui North ratepayer Mike Ranstead said he did not mind the increase, and that it was a reasonable consequence of living in a property hotspot and enjoying the capital gains that came with it.
Matua remained one of Tauranga's priciest suburbs, with a new average value of $857,000, but because its increase of 44 per cent was lower than most, $10 would be shaved off the average rates bill.
Richard Kluit, president of the Matua Residents' Association, said it showed the suburb had maintained consistently high values, without seeing the same spike as the Mount.
Simon Anderson, chief executive of Realty Group, which operates Eves and Bayleys Real Estate, said the increases were driven by "a big influx" of people from Auckland and, to a lesser extent, Wellington and Christchurch, in the first half of the three-year period.
Mount Maunganui's growth was driven by its enduring popularity and lack of land to expand into, while investors had seen value in the traditionally cheaper suburbs, driving prices up.
John Middleton, a retired registered valuer and committee member of the Pāpāmoa Residents and Ratepayers Association, said the suburb's 43 per cent to 45 per cent average increase reflected its role as a land-rich "release valve" for pressured areas like the Mount.