Petrol costs boost Queen city CBD rentals

Rising fuel costs may be driving the appeal of living closer to Auckland's central business district, according to Crockers Research.

Rental levels in Ponsonby, Grey Lynn and Westmere have risen sharply over the past 12 months, and Remuera is also showing early stages of a similar surge - for two-bedroom properties.

This doesn't apply to the three-bedroom market, with Ponsonby rentals falling back and both Remuera and City Bays showing recent declines for three-bedroom properties.

Crockers speculates that this may be a consequence of frustrated house sellers putting their properties into the rental market.

Auckland rental levels have largely held firm, with an average year-on-year increase of around 6 per cent for two and three bedroom properties. The average year-on-year increase nationally over the past 12 months has been around 8 per cent.

Slightly further out from the central business district there have been sharp rises in rental levels of two and three bedroom properties in the Meadowbank area. Glen Innes rental levels have also performed well since early 2006, albeit off a much lower base.

On the sale front, the decline evident in recent months appears to be slowing following a 5 per cent year-on-year decline in the median sales price, and a 42 per cent drop in sales.

Crockers says the impact of economic pressure on the Auckland property market has been spectacular, arising from a year-on-year rise of 8 per cent in food prices, and rising fuel costs.

Current house sale price falls are defying the popular view that property always increases in value. During the past five years the median sales price has steadily risen until this year.

Some areas in Auckland have performed better than others.

Although North Shore prices are holding firm, having come off an earlier peak, and Franklin appears to be holding, most areas are now showing declines in the six month rolling average of their median pricing.

Auckland city prices show a similar pattern to the North Shore.

Having peaked at a six- month average of around $525,000 in the period to September 2007, they have since fallen to a median level of around $480,000 in the six months to July 2008.