Grey Lynn was a slum housing area of Auckland 80 or 90 years ago. Today it's the city's high-flyer, writes Bruce Morris.

When Ponsonby was being discovered, Grey Lynn was being ignored. Over in Remuera, the only surprise was that they both weren't being shunned. ("You bought a house in Ponsonby - really? Why would you do that? But at least it's not that awful Grey Lynn.")

Ah, the things we know now that we wished we knew then.

Ponsonby, Grey Lynn and Freemans Bay were regarded as working class slums a century ago and low-rent suburbs until the 1970s when gentrification (the fancy word for people of means buying into poorer areas) changed the landscape.

Over a generation or so, the villas of Ponsonby turned from run-down to chic and the process slowly spread across the boundaries to Freemans Bay and Grey Lynn.

But that's old hat and Aucklanders interested in living in the city fringe could be excused for believing those patches have had their run and that investment elsewhere makes better sense.

So much for theories. In the nine months to June 30, Grey Lynn shows evidence of a suburb that is spurting ahead of the pack, with Ponsonby and Freemans Bay also doing much better than many Auckland city areas.

To come to that conclusion we have zeroed in on the seventh column of the tables spread across the middle pages in this Property Report - and merged the results with the previous two quarters to give greater statistical accuracy across more sales.

Those nine months of sales stretch back to September last year, with each price compared to its capital valuation (or rating valuation), producing an average "sale price in relation to CV".

Because capital valuations are set only every three years - and at different times, depending on the council - such an exercise has no comparative relevance outside the boundaries of a particular local authority.

To compare a Waitakere suburb with a part of the North Shore is not comparing apples with apples, because the last western valuation took effect in September 2007 and the Shore followed a year later.

But it is relevant to compare performances within the same council, and on that basis, for example (using the June quarter data), Onehunga (prices up 8.7 per cent on CV) and Pt Chevalier (up 9.2 per cent) have done better than Glen Innes (up 3.4 per cent) and St Heliers (up 2.2 per cent).

Nowhere, however, is the picture brighter than in Grey Lynn, where prices for the quarter were 21.3 per cent above CV and in the nine months to June 30 were up an average 19.7 per cent across 120 sales.

That is an impressive advance, increasing the personal wealth of people living in the suburb, though probably carrying a cost when the Super City computers start to churn out rate demands.

In second place in Auckland over the nine months was Westmere (up 16.2 per cent), with Sandringham and Parnell (14.5 per cent), One Tree Hill (13.8 per cent), Freemans Bay (13 per cent) and Ponsonby (12.3 per cent) not far behind.

At the bottom of the pack was Otahuhu, the only Auckland suburb to show a decline, which was down 6.6 per cent - a sure sign that prices fueled by investors and first-home buyers went too high in the boom.

Remember, too, that we're measuring performance since September 2008 and that the general market decline began more than a year earlier.

Among the weakest achievers were two of Auckland's finest suburbs - Herne Bay up around 1 per cent and Remuera, which rose 3.4 per cent in the nine months to June.

On the North Shore, where CVs were set a little later than in Auckland, the increases are less pronounced, and home-owners in two premier suburbs, Takapuna (average sale price down 6.5 per cent in the nine months) and Devonport (down 2.4 per cent) won't be too stressed at the prospect of big rate rises.

So what does all this tell us? Well, certainly not that Herne Bay, Remuera, Takapuna and Devonport are places to avoid now or in the future - far from it if you have the means and believe in location as the prime driver of value over time.

But when there are enough sales to give credence to the calculation, selling price compared to CV is as accurate a measure as any to assess overall value of an area compared to sister suburbs.

It's worth remembering, though, that while Grey Lynn is having its time in the sun now, the sun doesn't shine in the same place forever. Otahuhu can tell you all about that.

The big movers (CVs compared to selling prices)
AUCKLAND CITY (CVs set July 2008)
The top:
1 Grey Lynn up 21.3%
2 Royal Oak up 16.5%
3 Freemans Bay up 16.4%
4 Ponsonby up 15.8%
5 Parnell up 13.6%

The bottom:
1 Pt England down 9.8%
2 Oneroa down 5.2%
3 Otahuhu down 4.9%
4 Mission Bay down 3.8%
5 Herne Bay up 1.2%

NORTH SHORE CITY (CVs set September 2008)
The top:
1 Birkdale up 7.1%
2 Hillcrest up 8.4%
3 Northcote Pt up 6.7%
4 Stanley Pt up 5.6%
5 Bayview up 5.3%

The bottom:
1 Takapuna down 8.7%
2 Devonport down 5.8%
3 Castor Bay down 5%
4 Mairangi Bay down 1.9%
5 Chatswood down 1.3%

WAITAKERE CITY (CVs set September 2007)
The top:
1 Green Bay up 1.9%
2 Titirangi up 1.7%
3= Swanson and Te Atatu Peninsula up 1.2%
5 Green Bay and West Harbour up 0.1%

The bottom:
1 Kelston down 8.4%
2 Ranui down 3.3%
3 Henderson down 2.7%
4 Sunnyvale down 2.6%
5 Glendene down 2.5%

MANUKAU CITY (CVs set September 2008)
The top:
1 Somerville up 15.6%
2= Pakuranga Heights and Sunnyhills up 12.6%
4 Mellons Bay up 11.6%
5 Golflands and Botany Downs up 10.3%

The bottom:
1 Favona down 16.2%
2 Otara down 11.9%
3 Clendon Park down 11.3%
4 Clover Park down 6.1%
5 Totara Heights down 5.3%

HAMILTON CITY (CVs set September 2009)
The top:
1 Silverdale up 10.5%
2 Claudelands up 7.7%
3 Frankton up 6.8%
4 Flagstaff up 5.9%
5 Huntington and Pukete up 5.1%

The bottom:
1 Enderley down 10.3%
2 Forest Lake down 9.8%
3 Chartwell down 6.2%
4 Fairfield down 6.1%
5 Maeroa down 3.9%

TAURANGA CITY (CVs set July 2009)
The top:
1 Ohauiti up 7.2%
2 Bellevue up 4.4%
3 Greerton up 4.3%
4 Papamoa Beach up 3.8%
5 Otumoetai up 3.2%

The bottom:
1 Parkvale down 4.1%
2 Hairiri down 3.6%
3 Maungatapu down 3.3%
4 Mt Maunganui down 0.6%
5 Judea down 0.2%

* Lists show the suburbs recording the strongest - and the weakest - performances using actual house sales compared to their CVs in the three months to June 30, 2010. CVs are set at different times, depending on the council, so it is not valid to compare one local authority area with another. Source: QV.
* From the New Zealand Herald's quarterly 'Property Report' - a guide to house prices and great places to live.