A leasehold property owner has little certainty and that is enough to frighten many buyers. Therefore, leasehold prices, except in buildings where the fee purchase is readily available are priced low.
I hope this is helpful.
East Oahu Realty
--Financing - hard to find and get a loan under 30 yrs. and some mort companies won't finance LH properties.
--Lease Rent - when this rent is renegotiated to market value, it usually goes up, sometimes way up...
--Finite lease term before lease period is renegotiated. Renegotiation of the lease is usually done and in the better LH properties it is very likely. Yet the sooner you get to the end of the period, the more the value of the property may go down. This period is usually 10 to 15 years out.
All this being said, LH properties can enable a buyer to live in a more desireable place and area and neighborhood. For example, my building, Discovery Bay is right across from the beach and I bought it at a "discount" to the Fee Simple properties in the neighborhood. You can get more bang for the buck, sort to speak.
However, sometimes the lease is renegotiated and the term extended. Also, the land owner may decide to sell the land to the condo or homeowner. In those cases the value of the condo or home will most likely increase again.