Valuations could see rates hike

Thousands of Rotorua residents will see their property values jump as a result of the new valuations released this week.

REBECCA DEVINE finds out what it means.

M ark Collet's Lake Okareka property has skyrocketed in value over the past two decades.

It's something he should be thrilled about - but it could also cost him.

Revaluations released this week show his property's land value has jumped about 130 per cent over the past three years.

That increase may also mean a fairly significant rise in the rates he pays to the Rotorua District Council.

For the retired man, that's a worry.

While he believes he and his wife will be able to juggle expenses to pay for the possible rates increase, he knows there are others in the district who simply won't be able to afford it if they have to pay any more in rates.

Mr Collet and dozens of others in the area are waiting with bated breath to see what effect the new values will have on their rates.

They are hoping the council will come up with a fairer system like rating on capital value or putting a cap on residential rates.

Thousands of property owners across the Rotorua district will receive their three-yearly revaluations over the next week - with most properties increasing significantly in value.

But an increase in a property's valuation doesn't necessarily mean an increase in rates.

It all depends on whether each property increases more or less than the average increase in its rating group.

If its increase is above the average increase, rates are likely to go up.

If it is less than the average increase, they're likely to go down.

Overall the almost 30,000 properties in the Rotorua district are now worth more than $10 billion.

The new valuations aren't final and people have until mid-January to lodge appeals if they aren't happy with them.

For the district overall there was an increase of 51 per cent in capital values and 84 per cent in land values, showing a "very active" market.

There were increases throughout all sectors of the property market, which was in line with national trends.

The average house value in Rotorua is now $235,000, up 53 per cent, and the average section value is $105,000, up 95 per cent.

While properties at lakes Okareka and Tarawera have had big increases - 130 per cent on average in land value and 82 per cent on average in capital value - there's also been a major jump in smaller townships such as Mamaku and Reporoa.

In Mamaku $8000 sections have jumped to $20,000.

The rural sector has had strong buyer demand with a shortage of listings for sale.

Quotable Value, which carried out the revaluations, said there had been a significant rise in land values - especially those with subdivision potential.

Real Estate Institute of New Zealand Rotorua spokesman Ian McDowell said the increases echoed what they had been seeing in the property market.

While he hadn't analysed them yet, he said it was good news for Rotorua. However, the property market was influenced more by demand than by the valuations. "People use them if they are an advantage or say they don't mean anything if they are not. The market is based on demand."

Rotorua District Council corporate services director Jack Shallard said the increase in values would not increase the total amount the council receives from rates. However, how much the council gets from each ratepayer will change.

People needed to be aware that because their land value went up, it didn't necessarily mean their rates would go up, Mr Shallard said.

The new valuations will come into effect for rating purposes in the 2006/2007 financial year.