From $717 to $6675 in three decades: The meteoric rise of Wellington rates

Thursday, 25 July 2024

The self-described “disgruntled of Karori” doesn’t know how long she and her husband will be able to keep living in the house they have owned for decades.

Back in 1994, Judy Rohloff paid $717.38 in Wellington City Council rates. This year, after a large increase, she will pay $6675.92.

Nine years from now, based on council projections, she will pay $12,141 in rates for the year.

The self-described “disgruntled of Karori”, who has previously called for a Wellington City rates revolt, doesn’t know how long she and her husband — who retired five and four years ago respectively — will be able to keep living in the house they have owned for decades.

“We are hoping to. We have savings, we are hoping to but who knows,” she said. Insurance costs had also soared in recent times.

Infometrics chief forecaster Gareth Keirnan discusses the latest inflation rate.

They were both now on superannuation, and with a little bit of interest from bank savings that were “rapidly eroding”.

The council on Wednesday put its new rates online, meaning people could see their actual rates rises. The two councils that cover Karori — Wellington City and Greater Wellington Regional had rates rises of 18.5% and 20.5% respectively — but for many the actual increase was above 21%.

The regional council on Tuesday said this was because there were three areas across Wellington, with ratings based on values at different times. The council on Wednesday clarified there were actually nine areas but it used a tool, called equalised capital value, to smooth out anomalies caused by ratings values done at different times in the housing market.

While changing house values generally don’t affect rates, homes that change in value disproportionally to others can find themselves with lower, or higher, rates changes.

For Wellington City, the 18.5% increase came after three years of average increases of 12.8%, 8.8% then 12.3%.

It has been caused by a glut of big costs to the council including a cost blow out on the Town Hall strengthening, a major project to fix the central library, and a network of cycleways.

But the biggest shock to rates was the realisation that pipes had been underfunded for decades and are now at breaking point — to the extent that Wellington taps almost ran dry last summer.