Why are rates more expensive in smaller towns and districts?
Some investors will say: “Hold on, small towns have higher gross yields. This makes them the better investment”.
Yes, small towns do tend to have higher gross yield, but sometimes higher rates and other costs counteract this.
Every council needs a mayor, a chief executive, councillors and certain staff.
This is true whether you have a population of 4,690 (Mackenzie district) or 1,695,900 (Auckland).
But those fixed costs are spread over a smaller number of people.
Last year, the top 3 most expensive places for rates in the country had populations under 13,000.
This year, it’s the same (except the populations are all under 10,000).
Kaikoura district, where rates are the most expensive, has a population of 4,160.