Watercare bills to jump next month as Aucklanders face another cost hike
Aucklanders are facing another hit to the wallet, with water bills to leap by more than 7% from next month.
And developers face an even steeper increase, with the charges they pay per unit rising by 20%.
Watercare has confirmed households will face a 7.2% hike from July 1, increasing the average household bill of $120 a month by approximately $8 (a month).
It’s a double whammy for Aucklanders, with the council last week voting to increase rates by 7.9%.
“We understand households are really feeling pressure out there at the moment, so it was a very considered decision,” Watercare chief financial officer Angela Neeson told the Herald.
“The infrastructure that we deliver is necessary. It’s an essential service we provide to Auckland.”
Three things are looked at when assessing how much to hike bills, including future infrastructure requirements and overall funding.
“It’s a very delicate balancing act between all of those, but affordability is absolutely one of those key things,” Neeson said.
“We definitely considered, could this be any lower? And the challenge with making it lower is that it risks higher increases in the future. If we delay it, it just makes it more costly going forward.”
Developers face an even bigger hike, with the Infrastructure Growth Charge (IGC) being raised by 20%, the minimum required under regulatory settings.
The IGC is a one-off fee paid when new developments connect to the water and wastewater network.
The rate varies across the Auckland region.
For the metropolitan area, which includes the majority of customers, the increased price is around $4250 per unit (excluding GST).
“We recognise 20% is a fairly sizable increase. The thing that we try to do with our price changes, whether it’s for the infrastructure growth charge or whether it’s for our water and wastewater revenue is to not have price shocks,” Neeson said.
Property Council chief executive Leonie Freeman said every fee increase has a direct impact on whether a project stacks up.
“When costs rise – whether it’s materials, labour, or infrastructure charges – the numbers either work or they don’t. Right now, developers are already navigating one of the toughest feasibility environments we’ve seen. Adding to that burden makes it harder to get homes out of the ground,” Freeman told the Herald.
“Watercare’s fee increases don’t happen in isolation. They land on top of Auckland Council’s recent 7.9% rates increase, rising construction costs, high interest rates, development contributions, connection fees and a challenging consent environment.”
Those costs push projects to the margins.
Watercare says the funds help pay for the infrastructure needed to accommodate demand including new transmission pipes, pump stations, reservoirs and treatment capacity.
“Historically, there has been some cross-subsidisation of our water and wastewater charges,” Neeson said.
“Growth needs to pay for growth. The reason for the increase in the infrastructure growth charge and why it’s higher is because we are looking to get the balance right.”
Freeman said it was “fair” that growth should pay for growth, but there were other ways to do it.
“Providers of public infrastructure assets need to consider the full spectrum of funding tools that may be available to them, including Special Purpose Vehicles and Public-Private Partnerships. This can relieve the upfront cost burden on new home developers and purchasers.”
In response to some of that criticism, Neeson said the infrastructure had to be built and Watercare had to create capacity for that growth to happen.
Last year’s increase was 15.5%.
Next year’s charter estimates a minimum increase of 11.2%.
The current system for IGCs has been in place for over a decade and the pricing methodologies are under review.
“We’re also looking at potentially implementing development levies, and that legislation is still to come out, but we will be consulting with customers, early next year around any pricing structure changes that might be there in the future.”
Watercare said without the IGC, all customers would pay more for their water and wastewater services.
But Freeman said it was “unavoidable” that the increase meant the price of a finished home would go up too.
“People often think of a home’s price as the cost of building it. But the real cost of development includes a long list of fees and charges that never appear on a floor plan. When those fees increase, that cost is ultimately borne by the person buying the home.”
Freeman believed “excessive” fee increases from infrastructure providers moved the country in the wrong direction and instead the focus should be on making house building more affordable.
“Watercare is a monopoly provider, which makes transparency and accountability around any fee increase particularly important. Aucklanders and the development sector need confidence that charges are clearly justified, cost-reflective, and directly linked to the services and infrastructure being delivered,” she said.
The increases mark a year since Watercare became financially independent from Auckland Council.
Watercare is spending on average $3.8 million a day, with around half that on upgrading its existing network and the remainder on new infrastructure.
“We’re really focused on making sure we invest a good amount of money in renewals every year,” Neeson said.
“Historically, renewals have been a trade-off if funding has been tight and we recognise it’s not a trade-off we should be making.
“And that is one of the reasons why we are needing to increase prices because we recognise the network needs more attention from a resilience perspective, and that’s what we’re focused on.”
Watercare’s flagship project, the $1.6 billion Central Interceptor, is nearing completion.
Developers wishing to build in Helensville and Parakai face the biggest charge of over $55,500 per unit for water and wastewater.
The lowest charge is in Metropolitan areas, at just under $30,000 per unit.
The cost depends on what treatment plant buildings connect to.
“In some of those outskirts like Helensville for example, you have a smaller population and so when you’ve got a smaller population that’s needing to pay for a treatment plant, that means those charges are, are a bit higher,” Neeson said.
No further connections are available in Bombay, Kingseat, Muriwai and Waiwera.
The Watercare Charter, introduced by the Government in 2025, sets the framework for pricing, service quality, transparency and reporting while longer-term economic regulation is developed.
Katie Bradford is a Senior Correspondent at the Herald. She has been a broadcast journalist for over 20 years and was based in the press gallery for 10 years. She specialises in politics, business and Auckland issues.