Commentary
Napier residential property values have experienced relatively stable value levels. The market underwent considerable growth between 2002 and 2007, however value levels have remained relatively stable since. The median sale price increases in the last few years result partly from new housing stock and a modest across-the-board increase in values.
Crosslease property has not performed as well as freehold property. Values rose more modestly during the property boom and have remained stable since.
Over the past decade or two, market demand has increased for four bedroomed dwellings. Demand has outpaced new supply and has placed some additional value premium on four bedroom homes. Market values for three bedroom dwellings have been relatively stable in recent years, with a median sale price typically between $90,000 and $130,000 below four bedroom dwellings (note: they are typically larger and of superior quality). Two bedroom dwellings have experienced little value growth since 2007, and typically trade between $30,000 and $40,000 below three bedroom dwellings.
Crosslease property (typically two bedroom residential units on smaller partially shared sections) has experienced a growing discrepancy below freehold values. A discount of around 23% to 26% had been the norm, however more recently the discount has grown to over 30%. The crosslease housing stock is ageing and also predominantly being two bedrooms is experiencing reduced demand and increased competition from more modern retirement villages and quality apartments.
Leasehold property in Napier tends to experience some market resistance over and above the discount which could be expected on purely economic grounds. This often makes it viable to purchase a lessors interest in the property, in order to freehold the property. We recommend obtaining sound valuation advice if looking to freehold a property.
