Buyers looking for a place in the sun

Denise Melinsky

In 1869, Irish-born farmer Robert Langley Holmes bought a 304-acre estate on the northern island of Vanua Levu and paid “a very high price” of four shillings per acre. To further quote the quaint Cyclopaedia of Fiji, he worked hard to make a decent living off the land, selling copra and raising a few cattle and sheep.

Wavi Island... one acre lots advertised at US$ 500,000.

Today, had Holmes been lucky enough to live so long, he could have been a multi-millionaire without the bother of those messy cows or coconuts. All he would need to do is subdivide, then sell off his land piecemeal for up to $200,000 per acre, depending on the property's proximity to the ocean and the quality of its views.

Among landowners these days, the battle cry is “Sell! Sell! Sell!”, and that is precisely what's happening all over this island, particularly around the Wild West-type town of Savusavu. Not unlike a gold rush of yore, Fiji's second largest island is playing host to an amazing land sales boom among almost exclusively overseas buyers, all looking for a place in the sun and a vacation home to call their own.

Look on any hill around Savusavu and you'll see a new road etched into the hinterlands. Look closer and you'll find the survey sticks, their red flags fluttering in the breeze to denote lot boundaries. Take a gander at the number of earthmovers operating around the area and you'll probably soon lose count. Go into any pub in town and you'll hear heated conversations about who sold what for how much. Even when you sift through the beer-inflated rumours, you'll arrive at the solid fact that land sales and property values in these parts are skyrocketing. And you can forget about talking in local currency: today's prices are typically quoted in good ol' American greenbacks.

According to Aren Nunnick, who with his wife Kim, heads up Ki-Maren (Fiji) Ltd, one of the island's busy real estate firms, the average price of undeveloped beachfront property today is around US$80,000 per acre, going up to more than $200,000-“if you can find it,” he adds. Quality hillside sea-view lots aren't far behind, varying in price from US$40,000 to $80,000 an acre, with sales so brisk that he sometimes has trouble keeping sufficient “inventory” to meet the demand. At the top end of that scale, a buyer will likely get utilities, ready-made access and possibly even a prepared building site; at the low end, a buyer can expect to provide his own machete and elbow grease.

“Prices are easily climbing 20 percent per year,” Nunnick says, “and land that may not have been sold at a certain price to one buyer goes up before being offered to the next potential buyer.”

That obviously makes tropical real estate here a very good capital investment, good enough to attract second-time buyers. “Once people understand some of the frustrations of buying here, like time delays, and once their deals are complete and they realise everything worked out in the end, they often come back to me and say they want to buy more.”

Most shoppers hunting for land are average Joes and Janes, looking to escape stressful First World lifestyles. A majority hail from America, up to 80 percent by some estimates. Demographics play a big role in this trend, says Pettine Simpson, another major player in local business and owner of Savusavu Real Estate.

Those so-called “baby boomers”-a huge mass market comprised of children born directly after World War II-are now approaching retirement age. Because they grew up prosperous and fairly adventurous, the thought of retiring in a faraway place like Savusavu is appealing, she says.

With the weakening U.S. dollar, however, Australians and New Zealanders are making up a bigger piece of the pie these days. Rapidly rising property values in those countries spur people to think about selling out and buying something cheaper in, say, Fiji. Still, while almost all potential land buyers can boast about a comfortable wallet, most come with a budget in mind for their property purchase and subsequent development plans, Simpson adds.

Like moths to the flame, however, big-time developers have now been drawn into the fray. Take the consortium behind Wavi Island Resort Villa Estate, a 28-acre private island, located a stone's throw off the coastline of eastern Vanua Levu.

Access to the exclusive planned community will be by causeway, now under construction, and the less-than-one-acre lots are being advertised in the lofty neighbourhood for half-a-million dollars (US). Wavi's proposed high-security exclusivity will hopefully appeal to the Tom Cruises and Bill Gates of the world.

Even closer to home, Nawi, the landmark island located smack dab in Savusavu Bay, might be the next target for future development. Nunnick has the island under contract to a prospective buyer, and though he can't disclose details until the deal is finalised, scuttlebutt around town has it that Nawi could be another exclusive vacation home community in the making.

The 40-acre island, bought by an expatriate decades ago for F$60,000, now carries a price tag of approximately US$1.2 million. “All in all, there's something here for everyone,” Nunnick says.

Politics in paradise

Land values have been on the upturn since hitting rock bottom after Fiji's coup of 1987. Prior to that, Nunnick himself had been contemplating the purchase of a five-acre lot near Savusavu for F$25,000; after the coup, he decided instead to buy the entire 120-acre subdivision for a fraction more.

“People were scared and prices went through the floor,” he explains, “but I felt strongly that the coup could be a tremendous opportunity.”

It certainly was, though it took several years. Nunnick left his native Australia, moved to Fiji and concentrated his efforts on the burgeoning subdivision, eventually enlarging his scope to represent other property owners.

Prices ballooned until May 2000 when another coup brought down the democratically elected government of Mahendra Chaudhry.

For a variety of reasons, however, land sales rebounded quickly after a year of stagnation and have mushroomed since.

Now, most realtors believe the current land boom will feed itself and grow unabated. As early freehold landowners sell, they typically sell to foreigners for the best price, who in turn sell their property to other foreigners. The price goes up with every deal.

This is likely to mean that Savusavu will continue to ride on the coattails of the boom, no matter what crisis befalls the country or the world.