Napier City Council chief executive Wayne Jack said the year's result was not just about the Parklands sections.
"The financial result is very pleasing and is the result of strong financial management by the team combined with other factors such as Parklands sales."
Mayor Bill Dalton also praised the annual financial results.
"We have achieved a great result, based on a plan to reinvigorate Napier, while delivering our services in a cost effective and efficient manner.
"Our financial result has been boosted by an increase in non-rates income which was largely driven from the number of sales of Parklands sections, a council-led development."
Property prices have risen 28 per cent in Napier over the last year, according to REINZ figures, with supply continuing to be low.
"The economy locally is going from strength to strength and we are working hard on facilitating that growth," Mr Dalton said.
"Another busy year lies ahead for our council. We know that ratepayers expect us to keep the finances in order and that's what we are delivering."
Mr Jack acknowledged that the wider economy had an effect on the annual surplus.
"The end-of-financial-year result is always going to be dependent on a number of factors such as scale of capital projects as well as how the economy is performing.
"Tourism growth is forecast to be up 8 per cent to September 2017, and this has a positive flow on impact into our activities such as our National Aquarium of New Zealand, and our recently upgraded Conference Centre."
Just 49 per cent of the council's total revenue in 2016-17 came from rates, the annual report revealed.
