Tropical island lifestyle offers great allure
Living in a fancy, sun-drenched Pacific island is a dream which everyone cherishes. For most people it's all about the lifestyle and the pristine beaches.
'Who wouldn't want to live on a beautiful Pacific island?' asks real estate agent Christine Watson. 'It's all about lifestyle and price, and it is value for money.' Long-running British television programme A Place in the Sun first made everyone realise it's not just for the rich and famous. Island property might be under-developed by Western standards, but isn't that part of the attraction?
Investors look to overseas real estate for many reasons, and on an idyllic Pacific island, where the sun always shines, the people are warm and welcoming, and the market entry price is low.
The South Pacific offers plenty to choose from. In Fiji alone, there are 322 islands - or 18,333 square kilometres of desirable real estate, with an average temperature of 30 degrees Celsius - and the capital, Suva, is increasingly accessible via a short, direct flight.
Immigration permits are obtainable, and freehold or land tenure available to foreigners. But just as would-be investors might pack the sunscreen and flip-flops on a trip to check out property, they're advised to leave behind any expectations of a quick buck.
Philip Toogood, a veteran of local real estate, says: 'As I always tell my investors, who are looking at a strata titled resort property, if you're buying as an investment first and a holiday home second, you shouldn't do it.' Highly-geared investors who rely heavily on rental yield could get burned in any cyclical downturn.
But those who are happy to let their investment do its thing over the course of 'island time' will be rewarded. Toogood, director of Bayleys Real Estate, Fiji, who has been selling island property for 14 years, has learned the value of patience in a market so vulnerable to internal and external forces.
He recalls the downturn following the 2000 political coup in Fiji, when there was nothing to do but wait it out until 'the market suddenly took off' in 2003, with interest from around the world. 'It was like someone turned a light on,' Toogood says.
Good sales and 'amazing growth' continued until 2006, when there was another coup, and another softening. August 2007 saw a mini-recovery, but the busy time was cut short again by the global financial crisis of 2008. This, Toogood says, had a far more significant impact on Fiji than any local issues.
He explains that while it is not just the super-rich who buy island property, most put leisure buying on the backburner. This year, he says the tide has turned again.
There is 'substantial' interest from buyers worldwide, and much of it is coming not from the traditional markets of Australia, New Zealand, the United States and Britain, but from Asia in general, and Hong Kong and the mainland in particular.
Tourism is a driver. Air Pacific, Fiji's national carrier, launched direct flights between Hong Kong and Nadi last year, on a code share basis with Cathay Pacific, and this month announced the start of a third service.
As a result, Tourism Fiji trumpeted an 'exponential increase' in Chinese visitors in the first half of this year, up 31.3 per cent. The Shanghai World Expo, where the vibrant South Pacific is well represented, has opened the eyes of increasingly affluent mainlanders to the lure of island life.
Toogood, who is planning to tap their interest via property road shows to Hong Kong and Shanghai in the next six months, sees it as an awakening.
'There's been a perception in the past that Asian investors are not toes-in-the-sand kind of people. But come out to the islands and see how many are going out snorkeling. I believe they just haven't been exposed to it - many of them have never even been to the coast before - so they've never been aware of it. We see a very strong future for Fiji in Asia.'
Christine Watson, senior vice-president of Sydney-based Marquette Turner Luxury Homes, which markets Pacific islands property, agrees there has been increasing interest from Hong Kong and the mainland.
'I believe Chinese investors can see the benefits of what the Chinese government is doing in Fiji,' Watson says, citing the new Chinese embassy in Suva, and the Chinese investment money trickling in.
China's First Railway is building a housing project in Suva, and the government, which welcomes foreign investment, including property investment, met with a group of influential mainland businessmen expressing interest in two resort developments.
Although some of her Australian clients, who have bought in Fiji, subsequently decided to sell and return home, Turner says that was for health and family reasons.
On his roadshows to Hong Kong and the mainland, Toogood expects investors there to be like everyone else: wanting a piece of their island in the sun.
Fiji offers personal safety, and an amazing lifestyle.
Island life may not be perfect, he says, conceding political issues and an economy reliant 'very much on its mates'. But Toogood says his buyers don't seem worried about such issues.