Ross Tucker: Auckland Council Group CFO explains why Auckland home values have dropped

Auckland home values have fallen, down nine percent on CVs released in 2021.

New capital values are being released tomorrow for 630,000 properties, with inner-city suburbs taking a bigger hit.

Central Auckland areas - including Mount Eden and Maungakiekie - fell about 13 percent.

Auckland Council Group CFO, Ross Tucker, says a few reasons have driven the slump.

"We've seen apartments fall 12 percent, converted flats fall 12 percent as well - also, we're seeing some of the areas where there's a lot of development potential have bigger than average falls."

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Episode Transcript

Speaker 1 (00:00):
Big day tomorrow if you're an Auckland rate payer. That's
when the new property rating valuations will be released. Now,
on average, residential property values have fallen nine percent since
the last valuation in twenty twenty one. Ross Tucker is
Auckland Council Group CFO, Hey Ross, Hello gez. Nine percent
is a bit big war happened.

Speaker 2 (00:16):
So that's that is the movement that we've seen over
that period. So these are the rating valuations as it
May last year. It's and the nine percent is the
movement from twenty twenty one to twenty twenty four. This
reflects what we've seen in the market. Anyone that's been
following the property market will know things have come off
over that period largely due to rising higher interest rates.

(00:38):
And this is the results that we've seen. Okay, do
want to reet rate? These are rating valuations than not
that as of May last year. They're not an indication
what things would sell for today.

Speaker 1 (00:47):
Yes, and why has it fallen so much more in
the city center.

Speaker 2 (00:52):
So that that is that's the result of supply and
demand what we've seen. One of the reasons might be
that there is because of the apartments in converted flats
we've seen apartments for twelve percent, converted flats for twelve
percent as well. Also, we've seen some of the areas
where there's a lot of development potential have bigger than
average falls as well.

Speaker 1 (01:13):
Now, residential has gone down, industrial has gone up. Right,
Does that mean that residential pays less in rates than
industrial or are they each individually ring fenced and has
no bearing on the other.

Speaker 2 (01:25):
They are individually ring fence. Businesses do pay higher rates,
and that that is that's unchanged by these valuations. So
the rates increase is set by a budget, it's not
determined by the evaluations. The average is set by how
much money the council needs. Where the valuations come in
is who pays more than the average? Who pays what's

(01:48):
one's rates increases above or below the average?

Speaker 1 (01:50):
Hey, what's going on in Great Barrier? Did that just
go up thirty eight percent?

Speaker 2 (01:54):
It's gone up thirty eight percent. In the previous evaluations
that went up fifty nine percent. So what we've seen,
as it's moved up from a very low base, that
they still have the lowest capital value in any part
of Auckland. So it's about seven hundred and forty thousand
and they also have the lowest rates.

Speaker 1 (02:11):
Ross, thanks for talking us, I'd appreciate it. Ross Tucker
Auckland Council Group CFO.

Speaker 2 (02:16):
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