Ngati Whatua – Scene Apartments – How are the leasehold rent negotiations affecting price?

Further to the series of posts on the Ngati Whatua leasehold land, and my personal opinion that leasehold land tends to be purchased overvalued, Bob Dey notes in his newsletter today the impact that the present leasehold rent negotiations may be having on unit prices:

A 60m² leasehold unit in the Scene 3 apartment block at the city end of Quay Park was sold under the hammer at City Sales’ apartments action today for $144,000.

The one-bedroom unit has a deck and a parking space, but one big unknown: The building’s owners haven’t yet settled with the Ngati Whatua o Orakei Maori Trust Board on the ground lease. The unit originally sold for about $350,000 and the last sale, a year ago, was at $205,000.

Now, this is just the one unit, in one apartment building, so you can’t draw too much inference from it generally.  But still….$350,000 to $144,000!

The vendor in this case may have been particularly desperate – we just don’t know.  But Bob also notes that five other apartments in the same building failed to sell.  Gives the impression that it’s not so much the vendor as that no one wants to buy at any price until leasehold rent negotiations are finished.  Tough luck for sellers being pressured into a sale.