Napier -apartments and growth in general?

[QUARTERACRE]

Hi Guys
I've just spent the weekend looking at various apartments in Napier. Many of them have been sitting all Winter and vendors are selling them below what they purchased them for. Does any one have any experience in investing in Napier? any thoughts of an educated variety on this one?

[Julian Grainger]

Hi QA,
According our stats there has been no movement median sales price have been flat for the last two and a half years for these types of properties in Napier. Rents have increased nicely but are not presenting much of a rental yield - just under 5%.
Julian, qvinsider.co.nz

[QUARTERACRE]

thanks Julian.
Some of these apartments are of a very high quality..but as your stats suggest, very few buyers at these prices. The real estate agents I spoke to where very forthcoming in admitting it was very tough right now. I'm just looking at my figures and deciding if this is a good time to buy at the right price of course
The renters seem to be there!

[tricky]

I'm not an expert in the Napier apartment market but if the market is flat now and with the continuous building of new apartments around the port then I'd expect the prices to stay low for some time to come. Which means you'll have to get good cashflow to compensate the poor capital gain.
It sounds similar to the Ak cbd market - off the plan investors in Ak have lost tens of thousands of $$$$.
Sit back and watch and wait.
And only consider the very best quality.

What apartments/buildings have caught your eye and what are the expected selling prices?
What rents are these apartments comanding?

[QUARTERACRE]

Hi Tricky
I liked Ahuriri(West quay and the Quadrant).
Renting for 2 bed $390 fully furnished up to$600
Renting for 3 bed $500 " " " " $700
prices fom 450k (?)up to the heavens prices (depending on motivation, size etc)
Body corp fees in these apartments high though and land is lease hold.About 5 to 7k per year including land lease.

Very good quality with underground internal carpark for 2 cars. Use of pool and gymnasium. Some have better views than others across sea or lagoon. 2 minutes to all seaside bars and cafes.
Have to get them at the right price..whatever that is..
What do you think?

[NzDuder]

Someone pointed me in the direction of these Napier Apartments. It certainly was an attractive offer , I won't go in to details but it was contracted so the numbers came out as positive cash flow. Sounded too good to be true. I'm not local from Napier and know nothing about the area.

I spent the night trying to decide whether this was a fantastic offer or not. I trusted my instincts and held back. Like with the other replies, they're only going to build more and more.

In three or four years time buyers will be selling their apartments and future buyers will have a direct comparison....so if you get one make sure its the best one.

I had no idea for tenant demand either or have a solid rental assessment. I didn't have the time to do my homework and chose to sit and wait .... there will be others built over the coming year(s).

All the best NzDuder.

[QUARTERACRE]

Hi NZ
Yes I realise there are plenty being built but I guess I'm thinking about the impact retiring baby boomers will have(or not) on the market. Especially areas like Napier where the warm climate and the arty cultural scene, the wine scene along with sports clubs catering to that age group are very appealing.
My parents have purchased a less expensive apartment in town and this got me interested.
What was the contract deal that you were lead to??

[tricky]

I think if you feed those figures into a spreadsheet, you'll end up with a huge loss each year.
If there's no capital gain, what's good about these deals?

I don't know the Napier rental market but I'm suspicious of those rental figures you've quoted. Did a sales agent tell you them?

No offense intended of course.
If you can find a good deal, I'll be interested.