The two small flats at 8 Dungarvon St lost much of their sunny aspect a few years back when large concrete walls were erected behind the Speights Bar and Spencer Mall, but occupy one of the few remaining development sites in the central business district.
It is understood the owners paid about $600,000 for the property within the last decade.
The Dungarvon St flats represent two of five remaining residential properties in the central business district bordered by Ardmore St, Dungarvon St and Brownston St.
The two-bedroom flats are valued for rating purposes at $425,000 each and have been rented out for more than 10 years, currently bringing in about $180 per week. .
The rent is somewhat less than that being advertised for houses in other areas of town - those rents range between $210 (two bedroom) to $500 (four bedrooms).
The Dungarvon St flats' valuation for rating purposes is also much less than valuations for other domestic-scale buildings but can be expected to change as new valuations are being released this week.
Two other houses within the CBD with rateable valuations of $1.2 million-$1.3 million last year, were recently demolished and each now sport commercial complexes worth several million dollars.
Harcourts real estate agent Dan Pinckney said on Thursday he was still negotiating with one or two people who were quite positive about the Dungarvon St flats and working through due diligence, but he had noticed people were being more cautious about property investments.
"They didn't sell. I thought . . . I had several people who were going to put an offer in but they said what's been happening in the [United] States in the last three weeks has been the main reason they have pulled out."
Mr Pinckney said the Dungarvon St flats appealed to potential developers but in the present climate it might take two years before a new owner decided what to do with the land.
He could not discuss likely prices for the flats because it was "hard to know" and there had been no recent sales of similar properties on lower Dungarvon St to compare it to.
"I could be $1 million out, easily. Nothing has sold along there for years and years. It would be impossible to put a figure on it."
Late last month, Wanaka real estate industry spokesman Ross Rainsford said - in response to questions from the ODT about how the Wanaka property market was holding up during the financial crisis - that sales were starting to slow up but the town was no different in that respect to the rest of New Zealand.
It was becoming more difficult to raise money for commercial property investments, as finance company investors were withdrawing their money.
Prospective commercial property purchasers would have a problem raising money unless they were well cashed up.
There was pressure on prices, but more particularly with section sales, Mr Rainsford said.
The good news was that the Grand Mercure Oakridge resort, which had experienced cash flow problems, had proved it was strong enough to attract alternative finance, indicating financiers still had confidence in Wanaka.
A Westpac economist had told agents at a recent breakfast meeting in Queenstown, sales might pick up with the easing of tax rates and a lower cash rate, but that would probably not result in an increase in prices for some time, Mr Rainsford said.
"The trouble with these cycles is that you don't know that we have passed the bottom until six months later.
"Bob Jones always said that it is best to buy when no-one else is and to go on holiday when everyone else is buying.
"I have no doubt that this will again prove right again in this market," Mr Rainsford said.
Wanaka real estate does attract residents from overseas, but they appeared to be mostly expatiates.
Australians had been buying quite a lot in Queenstown and to some extent in Wanaka, due to favourable exchange rates.
"We do not rely heavily on off-shore purchases as our records show that is is only about 8% of our market," Mr Rainsford said.
Remax agent Howard Brown said on Thursday a section at 42 Kelliher Dr with a cash reserve price of $320,000 had not attracted an offer when tenders closed on Monday.
Earlier, the section had been marketed at $399,000. The section remained on the market by private treaty at a listed price of $320,000.
The tender process had still been successful in identifying interested purchasers, even though it did not sell on the day, Mr Brown said.
Meanwhile, Quotable Value New Zealand this week began sending new valuations to Wanaka residents and values are increasing.
An "entry level" house in Albert Town, previously valued three years ago at $350,000, has been valued at $400,000 (a 14.2% increase) despite no improvements since the last valuation.
An undeveloped residential section near Mt Iron remained the same: $210,000.
The value of the Wanaka Masonic Lodge in Dunmore St (which is in the central business district) leapt from $600,000 three years ago to $1.6 million, (a 166% increase), lodge spokesman Gordon Girvan said yesterday.
