Auckland house prices: New QV figures show massive rises

House values across Auckland have increased 45 percent in the three years since the last official valuations were done, Auckland Council has revealed.

Waiheke, Ōtara-Papetoetoe, Papakura, Māngere-Ōtāhuhu, Manurewa, Henderson-Massey, Maungakiekie-Tāmaki, Franklin, Howick, Rodney and Upper Harbour were all ahead of that, and residents in those local board areas should be bracing for rates increases above the expected 2.5 percent.

The fastest-growing region was Waiheke, where values have risen 64 percent, followed by Ōtara-Papetoetoe and Papakura, on 62 and 61 percent respectively.

Great Barrier Island brought up the rear, with the lowest increase of 11 percent since 2014. Of the on-shore local boards, Kaipatiki on the North Shore saw the lowest growth at 39 percent.

How values have changed in the last three years.
How values have changed in the last three years. Photo credit: Auckland Council

"We expected to see an increase in valuations since the last revaluation in 2014, so movements in the 40 percent to 50 percent bracket really aren't a surprise," said Auckland Council Head of Rates, Debbie Acott.

Why Ōtara-Papetoetoe and Papakura are getting more expensive

Auckland Council says these south Auckland locales are "relatively central but affordable compared to the inner city".

They're also an attractive investment for developers looking for a quick buck.

A closer look

The suburb with the highest jump in QV valuations is Paerata/Runciman, a rural locale between Pukekohe and Ramarama, where values leapt 151 percent.

Wainui/Waitoki, located west of Whangaparaoa and east of Helensville, saw values rise 102 percent.

Third went to Westgate, where an enormous new shopping precinct has been in development in the last few years. Values there are up 86 percent.

The only suburb in the entire region where prices fell was Kawau Island, where only about 80 people live.

Does this mean I'll be paying higher rates?

Not necessarily. If the value of every home went up the same percentage across the city, the only hike homeowners would be charged is the annual approximately 2.5 percent increase.

Owners of homes that went up in value more than the average 45 percent are likely to see hikes above that, while homes that went up less than 45 percent - or more rarely, fell - might even see cuts to their rates bill.

"Property valuations are used to help us work out everyone's share of rates - they don't mean that we collect any more money," said Ms Acott.

"However, we won't know the impact of this revaluation on rates until we agree our next budget in 2018, so I encourage Aucklanders to view these valuations with that in mind."

She said the QV figures are used to calculate rates, but shouldn't be viewed as the current market value.

Why are prices rising so fast?

Auckland Council says there are three main drivers of increasing house values.

"First, Auckland's strong population growth over the last three years has not been matched by increases in the number of new houses being built, and this has pushed prices up," said Auckland Council chief economist David Norman.

"Second, record low interest rates have allowed people to bid up prices to secure somewhere to live because housing has been in short supply.

"And third, the Unitary Plan has added a lot of value to properties that can now carry higher intensity residential development than before."

The present Government in the past has also blamed high immigration, most of which went to Auckland, and tax rules that incentivise housing speculation over other investments.