Wellington's mayor says the city is in good shape despite spending millions after the Kaikoura earthquake.

LISTEN ABOVE: Justin Lester spoke to Jack Tame on Larry Williams Drive about his State of the City speech

Justin Lester has this morning delivered his first State of the City speech.

He said the council has forked out more than $5 million in emergency spending due to the November quake, but the books are still looking good.

Mr Lester has been focused on spending less since becoming mayor and says they've already found more than $11 million in efficiencies.

He said this is from the likes of re-prioritising and re-phasing capital expenditure, better utilisation of council space and increases in energy efficiency.

Because of the savings, rates will increase by 3.3 percent this year - rather than the forecast 5.1 percent.

Meanwhile, Mr Lester wants to unlock land on the fringes of the city for development, and says two landowners hold the keys.

He said there's around 490 hectares of greenfield land that could be developed right now.

Mr Lester said the majority of the land is owned by just two people, who have all the control.

"Well hopefully we can work with them in partnership. We want to create more competition so we've got the opportunity through urban development agencies to perhaps require more development and more competition, and that's something we want to explore over the course of the next 12 months."