There’s a lot of trouble in Auckland right now. Homelessness is growing. Many mostly-young or poor people are facing the prospect of never owning a home in the city. But this week the media has highlighted the plight of another group of Aucklanders who are doing it tough: people whose houses are making too much money. Hayden Donnell pleads for us to keep unexpectedly asset-rich homeowners in our thoughts and prayers.

Auckland Council released its latest property valuations this week, showing house prices have risen by an average of 46% in the city over the last three years. The average Auckland house is now worth more than $1 million. Herne Bay houses may soon hit an average of $3 million.

Many have celebrated the valuations. But others asked the question: is there potentially a downside to property being priced beyond the reach of all but a diminishing, aging group of landed gentry? Thankfully our journalists were on the case. Led by Radio New Zealand – so often a bastion for stories about the plight of our non-homeowners – they turned a critical eye toward the data. They drilled down. And finally they found a group of people who might be suffering from the flip-side of massive house price inflation: homeowners who mistakenly believe they’ll incur large rates rises as a result of their gigantic, barely taxed capital gains. We need to keep these people in our thoughts and prayers.

Look at the plight of Juliet, whose Piha bach nearly doubled in value over the last three years. Juliet – who also owns a Ponsonby villa – said it didn’t seem right that the valuation of her all-but-untaxed asset had increased in from $675,000 to more than $1 million. The council may have overestimated improvements to her house, she said. Many Aucklanders have problems, but making a half-million dollar capital gain on your beachfront investment property seems a particularly cruel burden to bear. Juliet deserves our sympathy.

Think too of Anthony, who in the same story complains that he may have to pay more rates because his Dairy Flat home has risen in value by 75%. “You wonder why the rates go up because we don’t get any wastewater, no buses,” he said. Luckily the Unitary Plan allows for increased building intensity in city fringe areas like Dairy Flat, which will necessitate extra services such as wastewater and buses. But that doesn’t make it less painful that his house has grown in value by an even more galactically huge amount than those in the rest of Auckland, and thus may incur several dozens more dollars in rates.

Think of him – but not for too long – because we must beam prayers to Michael Barnett. The chairman of the Auckland Chamber of Commerce went on Radio New Zealand to argue for a change in the rating system. “Just because I’m rich and you’re poor doesn’t mean there’s a difference in services or quality of services provided” he said, making the case that it’s unfair to ask people with million dollar-plus properties to pay more to council than low-income renters.

Mike Hosking, too, highlighted the plight of the asset-rich. “The concept that we pay rates based on the value of our house is, of course, insane,” he wrote. “No one knows this better than those on fixed incomes. Through no fault or doing of their own, your income has gone nowhere fast, but your house has. And because your house has, the bill goes up.”

Thankfully there’s good news for Hosking, who is currently selling his Remuera mansion to make room for his growing family. People on low fixed incomes who struggle to afford their rates bill can apply for a rates rebate. If Hosking’s income meets the criteria, he can get some of his rates expenditure back.

But there’s not just good news for Hosking. All these unhappy paper millionaires and the media reporting on them will be pleased to know that their complaints seem to be based on a fundamental misunderstanding of how rates work. Having a house that drastically increases in value doesn’t automatically mean your rates will go up drastically. The total rates bill is set separately to these valuations – at an average of 2.5% per household. The only thing the valuations affect is what percentage of the bill each property will pay. If someone’s house rises in value more than the citywide average of 46%, they’ll pay a little more. If their house increased in value less than 46%, they’ll pay less.

That will please Hosking. Remuera houses only increased in value by 42% on average.

Nor need someone like Anthony of Dairy Flat worry too much. His 75% house price increase will mean a rates rise of 3.7%, rather than the citywide average of 2.5%, though he will likely be coming from a comparatively low base.

But even if the effects aren’t as devastating as they imagine, all this complaining from homeowners about their high house prices is significant. They may not be suffering physically – like for instance, a family living in a cold, mouldy garage – but they are suffering emotionally, and the brain is the body’s most important organ.

Maybe all this psychic trauma brought on by their unfeasibly high house prices will result in a profound political change. Is Labour ready for a fever-pitched campaign from homeowners for them to introduce a capital gains tax, launch a massive building programme for high-density housing, and end negative gearing? One thing’s for sure: these people don’t want to deal any more with the burden of having overvalued houses.