The Shoalhaven has seen the largest decrease in residential land values for the South Coast region over the past year, yet ratepayers could soon face a rate increase of up to 32 per cent.
The NSW Valuer General has published land values for the region as at July 2023, with a 10.2 per cent decrease in residential land value experienced in the Shoalhaven and a 6.2 per cent drop in Wollongong.
The drop in land value comes just as Shoalhaven City Council is set to apply to the Independent Pricing and Regulatory Tribunal (IPART) for a special rate variation (SRV) to mitigate its current annual shortfall of $25 million to $35 million.
According to council, the rate rise would “reinstate unrestricted cash reserves, fix the structural operating deficit position and to generate sufficient cash from operations” to continue to deliver services and maintain or improve major assets such as roads, bridges and community facilities.
The two proposed SRV options on the table for the community to consider are a 32 per cent increase in 2024-25, or an 18 per cent increase in 2024-25, 13 per cent increase in 2025-26 and 8 per cent increase in 2026-27 (inclusive of rate peg).
The first option would see the average residential rate increase by $467 for 12 months.
Shoalhaven Mayor Amanda Findley said changes in property valuations had no impact on the amount in rates that councils could collect.
“That is controlled by IPART,” she said.
“Valuation changes impact on each household’s ad valorem portion of rates which can mean larger variations for households that have big valuation leaps.”
Following calls for comment, Cr Findley said councillors had received submissions containing “great ideas that could be useful in reducing the structural deficit”, with a decision regarding the rate rise to be made in June.
“All councillors are united in that we don’t want to leave any stone unturned that will minimise the impact on residents,” she said.
“One resident recently described to me that the $300 rate relief that council gave everyone in 2020, was basically a loan that now needs to be paid back to help secure the financial future.”
The discussion on rates will continue over the coming months and residents can have their say on the council website.
The residential land values reflect the value of land only, as at 1 July 2023, and property sales are the most important factor valuers consider when determining land values.
Overall, South Coast residential land values have decreased by 5.6 per cent, while the total land value for the South Coast region, including commercial, industrial and rural land, showed a slight decrease of 3.7 per cent between 1 July 2022 and 1 July 2023, from $215.5 billion to $207.5 billion.
In contrast, according to Core Logic sales data, in the Illawarra region, the suburb of Wollongong experienced a 5.6 per cent increase in the median house price over the past year, which now sits at $1,002,913.