Auckland’s CBD has taken a hit throughout the pandemic as forced reduction of mobility, working and studying from home, closed borders, and a desire for more space have all contributed to the creation of a new suburban age.
Ray White chief economist Nerida Conisbee said the pandemic had had a clear negative impact on Auckland’s city centre.
“Office vacancy rates in Auckland are now at the highest level in over a decade and will continue to climb as the fallout from fewer people in the office continues,” Ms Conisbee said.
“Retail vacancy is also increasing and currently one in ten shops are vacant.
“While residential rents are rising everywhere in New Zealand, it is not the case in Auckland city centre where high levels of building activity and low levels of demand have resulted in falling rents.
“The longer lockdowns and forced working from home continue, the longer it will take for the city centre to recover.”
Ms Conisbee said the suburbs were seeing huge growth not seen since inner-urban living became popular late last century.
“We have seen very strong conditions in the suburbs, coming at the expense of our inner urban areas,” she said.
“Many retail strips that were previously seeing low levels of foot traffic have become active again.
“Suburban office markets have done better in maintaining tenants than in the city centre.
“As people are no longer so restricted to live close to where they work and being locked down a lot puts a higher price on space, house prices in outer suburban areas that have typically underperformed inner areas, have accelerated more quickly than inner areas.”
To calculate how much Covid has made suburban living more desirable, Ms Conisbee compared median prices in Auckland’s outer suburban areas compared to inner urban areas.
While house prices within 0-5km of Auckland’s city centre have increased 18.8 per cent since Covid started, houses 5-15km from the CBD have seen price increases of 23.6 percent, and prices for houses more than 15km from the CBD have seen price increases of 23.7 per cent.
Located approximately 12km from the Auckland CBD, the suburb of Penrose saw the highest increase in median house price since the pandemic started, sitting at 90.4 per cent.
The median pre-covid house price in Penrose was $709,971 increasing to $1,351,887 post-covid.
The suburb of Redvale experienced the next highest increase in median house price since the pandemic started, jumping up by 89.2 per cent.