QV's Simon Willocks answered councillors' questions during a meeting on Tuesday. Photo / Bevan Conley
QV lead valuer Simon Willock was in the hot seat at the Whanganui District Council following the release of the district’s triennial property rating valuations.
On average, the value of residential housing increased by 53 per cent since 2019 and the corresponding average land value went up by 96 per cent.
The valuations reflect a property’s likely selling price on October 1, 2022, but since then the housing market in Whanganui has cooled significantly.
At the council’s meeting on Tuesday, Willock said completing a revaluation whenever property prices dropped was not feasible.
“This is a snapshot in time and what happens afterwards, we can’t realise that as it happens.”
Residential properties made up around 80 per cent of the 22,316 valuations undertaken by QV (Quotable Value) on behalf of the council.
According to the council’s website, if a property value increases by about the average amount, it will have an average rates increase; if the property value increases more than the average, there will be a greater-than-average rates increase, and if a property value increases by less than the average, it will have a lower-than-average rates increase.
Aramoho, Castlecliff, Gonville and Whanganui East all had an average land value increase of more than 100 per cent, compared with the district increase of 96 per cent.
Capital values (what the property might have sold for at the date of valuation) in Aramoho, Castlecliff and rural Whanganui increased by more than the average of 53 per cent.
The council is due to release its rates plan for public consultation in the next few weeks, with the current prediction being an 8.4 per cent increase.
Councillor Philippa Baker-Hogan said some of the valuation increases were “significant and alarming”, especially during a cost-of-living crisis and high inflation.
She was concerned lower socioeconomic suburbs would be worse off when it came to new rates, she said.
Councillor Jenny Duncan said property rating valuation was an example of how “completely and utterly flawed” the funding system for local government was.
Local councils were required to use that system, she said.
“We’ve got a council that uses those values to rate people and we are going to have even more people taxed, which is what a rate is, on unrealised capital gains.
“I really feel for our rating department and how our staff are going to be confronted with so many people who will be really struggling.
“What we are seeing here is those suburbs who, on average, have lower incomes are going to have significantly larger percentage increases and they are going to have to pay it.”
Whanganui Mayor Andrew Tripe said the timing of the valuations was not ideal.
“We know life has been tough for many people in our community with cost-of-living pressures only increasing in recent times.
“As part of the annual plan process, we’ve gone through the council books to find areas where we can make savings while still ensuring we’re investing in services and facilities to help our district thrive.”
Tripe said some property owners would not be particularly affected by QV’s revaluations but for others, the revaluation would exacerbate an already stressful scenario.
“If you’re struggling to pay rates I’d encourage you to get in touch with our rates team – there are options available,” he said.
Councillor Rob Vinsen said the only method of measuring rates that had ever been devised other than property valuations was the poll tax, which caused riots in England when then-prime minister Margaret Thatcher introduced it.
“I would predict that if we thought about a poll tax here, the same thing would happen,” Vinsen said.
Property owners have until April 14 to lodge an objection. Willocks said 25 had been lodged so far.
It came down to what a property was worth in October 2022, not what it was worth now, he said.
“If you’re not comparing like with like in terms of dates, we are always going to be at odds. We would agree with a real estate agent’s appraisal of what the property is worth today, but that’s not what we’re doing.
“We are trying to establish if the value we set in October was appropriate, fair and reasonable at that time.”
To lodge an objection, a property owner only needed to give a contact phone number and what they thought the value should be, Willocks said.
Councillor Michael Law suggested property owners in areas with high land-value increases, such as Castlecliff and Aramoho, should look into subdividing to make the best out of a “sorry situation”.
Councillor Ross Fallen said he understood there were 7000 properties in Whanganui that could be subdivided and he would like to look at what incentives the council could offer to encourage people to do it.
More information about rates is available on the council’s website at www.whanganui.govt.nz/Property/Rates