More than half of Auckland households will get a rates increase of less than 2.5 per cent this year, but many households in the city's poorest suburbs will pay more.

Figures released to the Herald show the effect of new property valuations on the overall rates increase of 2.5 per cent, which came into effect on July 1.

It will be three weeks before most households learn about the increases when the first rates notices go out on August 1.

Any rise in expenditure will affect people in my Local Board area because the majority in our area do suffer from high levels of deprivation

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All up, 57 per cent of households will pay less than 2.5 per cent and 43 per cent will pay more. When it comes to big rates increases, 46,235, or nearly one in 10 households, will pay more than 10 per cent.

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People in Otara and other South Auckland suburbs will see rates rise more than 2.5 per cent.
People in Otara and other South Auckland suburbs will see rates rise more than 2.5 per cent.

The changes are consistent with what was flagged when new property valuations were released last November, showing house prices had risen on average by 46 per cent since the 2014 valuations.

Properties which rose by more than the average increase of 46 per cent will pay more in rates, and vice versa.

Many of the large rates increases are occurring in the South Auckland suburbs of Manurewa, Otara, Papatoetoe, Mangere, Papakura and out west where house price growth was the greatest.

In many wealthy areas, such as Devonport, Freemans Bay and St Marys Bay, that experienced strong price growth before 2014 which had since tapered off, rates are going down. Some 17,919 households will get a rates cut of more than 10 per cent.

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Mayor Phil Goff said the new valuations are a technical, not a political process, that takes place every three years, saying the new 10-year budget the council has delivered on his promise to keep the average general rates rise to 2.5 per cent.

"Properties with an increase higher than 2.5 per cent are largely outer suburbs that have seen a corresponding increase in their capital value.

"In addition, these areas have seen far greater increases in capital value when compared with more central suburbs where significant rises in CV were largely captured by the 2014 revaluation," he said.

Goff said nobody wants to pay more in rates, but through the budget, the council has struck a fair balance between keeping average general rates low and making the investment in the city's transport system, housing and environment that Aucklanders demand.

Otara-Papatoetoe Local Board chairwoman Lotu Fili was unaware many people in her South Auckland community faced rates increase above 2.5 per cent.

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"Any rise in expenditure will affect people in my Local Board area because the majority in our area do suffer from high levels of deprivation," she said.

The latest valuations found that many homes in Otara were low-cost properties from the 1960s onwards, which investors had looked to buy, renovate and sell for a quick gain, the council said last November.

Another example of high price growth was Papakura, which the council said remained affordable and popular with first-home buyers. New subdivisions with affordable housing, plus improved trains and roads, were other contributing factors to a prices rising by more than 60 per cent.

Alan Johnson, a policy analyst with the Salvation Army and former Manukau City councillor, said the impact of higher rates in South Auckland would not be massive because most people do not own property.

He said landlords could afford to absorb what was not a big increase in dollar terms and not have to raise rents.

Changes in rates - Number of residential properties

Greater than minus 10 per cent - 17,919

Between minus 5 per cent and minus 10 per cent - 33,096

Between 2.5 per cent and minus 5 per cent - 219,314

Between 2.5 per cent and five per cent - 79,834

Between 5 per cent and 10 per cent - 77,094

Greater than 10 per cent - 46,235

Total number of residential properties - 473,492

Source: Auckland Council