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City home valuations jump 60pc

Ethan Te Ora ethan.teora@stuff.co.nz

Home values in every suburb throughout Wellington city now exceed $1 million, according to new council rating valuations – pushing home ownership even further away for first-home buyers.

The figures, which are produced by Quotable Value (QV) every three years, show a jump of 60.4 per cent in average residential house values across the city. In 2018, the last time homes were valued, there were just nine million-dollar suburbs. Now, every suburb is worth more than $1m, and there are four $2m suburbs: Seatoun, Oriental Bay, Roseneath and Kelburn.

Infometrics principal economist Brad Olsen said owning a house in Wellington was now the domain of millionaires.

‘‘The growth is astronomical,’’ he said. ‘‘Wellington really does seem to be millionaire’s paradise. The fact that now nowhere in Wellington is worth less than $1m – you have to be a wannabe millionaire to buy in the city now.’’

Suburbs that are considered comparatively affordable – Tawa, Miramar, Strathmore Park, Paparangi, Woodridge and Newlands – all saw increases north of 65 per cent. Tawa West, among those suburbs, saw the biggest increase of 70.6 per cent.

By comparison, Mt Victoria and Thorndon saw smaller increases – 42 per cent and 39 per cent, respectively, although both suburbs inched towards an average value of $2m. Seatoun had the highest average value of $2.4m.

Olsen said the new average home value equated to a $286,000 deposit for first-home buyers. ‘‘You’re asking people to stump up a quarter million to even start to buy a house. The hurdles are enormous.’’

Wellington City Council financial strategy and treasury manager Marty Read said it was important that property owners remembered a change in the rateable value of a property did not mean rates would change by a similar percentage.

The council used property values to allocate the rates it needed to collect between all ratepayers, he said. It didn’t collect more rates just because capital values had increased, and, therefore, it didn’t collect less rates if capital values decreased.

Economist Shamubeel Eaqub, however, said suburbs that had seen a higher rate of increase – for instance, Tawa – could expect a proportionate rates increase.

‘‘I imagine there will be rates increases everywhere – it’s just the proportion of the rate of increase will be higher,’’ he said. ‘‘Let’s say if rates increase by 5 per cent in Tawa, it might increase by 3 per cent in Mt Victoria. But the difference will be that Mt Vic would be starting from a much higher level, because the average house value is much higher.’’

Wellington city councillor Diane Calvert, who chairs the council’s finance committee, said Eaqub’s assessment was correct.

Mayor Andy Foster said there would be a range of effects on different homeowners’ rates.

‘‘It is going to have some adverse effects on some people, and some positive effects on other people . . . Valuations are a time of shocks, sometimes.’’

Commercial property values, meanwhile, had increased by a smaller amount – 36.1 per cent – and that was a possible bright spot for struggling inner-city businesses, Calvert said.

‘‘They may see a reduction in their rates based on the current rate take. But that might mean that there’s an increase right across the board on the residential side.’’

Councillor Rebecca Matthews called the situation ‘‘completely ludicrous’’, and said it illustrated the need to build more houses.

‘‘I never want to hear from another property owner about reasons why we shouldn’t build more houses, and why we should protect single-unit dwellings in our inner-city suburbs.’’

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2021-12-01T08:00:00.0000000Z

2021-12-01T08:00:00.0000000Z

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