x Abu Dhabi, UAEWednesday 24 January 2018

Bargain time for island shopping

The dream of owning a private island is easier than ever before, with prices coming down around the world

Diamond Cay Island in Honduras is among dozens of islands that are in private hands. Courtesy Private Islands
Diamond Cay Island in Honduras is among dozens of islands that are in private hands. Courtesy Private Islands

Prices are falling and have even halved in some cases, and the internet means finding a piece of paradise has never been easier. But living the Robinson Crusoe lifestyle does not come easy. Workers have to be housed and building licences can take years to obtain. Kevin Brass reports

You don't have to be a billionaire, reclusive celebrity or even a super villain to own a private island these days.

The price of paradise is dropping around the world, estate agents report, and more islands are available.

They range from swampy bits of coral to lavish getaways with all the modern amenities, as well as man-made retreats in Dubai and elsewhere.

"This is still a brand new industry," says Chris Krolow, the chief executive of Private Island, a Canadian company that specialises in island sales.

These exotic pieces of land were once primarily a local business, sold by word of mouth. But the rise of the internet has turned the market into a global cottage industry, with websites, magazines and estate agents targeting buyers and sellers around the world.

Mr Krolow's websites, which attract about 4 million visitors a year, list 550 islands for sale, with an additional 250 in a "black book". Those are privately marketed to a select clientele.

"Generally, clients with high-end properties don't want to put them on the website," says Mr Krolow.

By all accounts, sales of islands have slowed in the past two years after the global financial downturn. Many of them have been on the market for years, waiting for a buyer.

"Prices are inflated and unrealistically high," says Peter Luppi, a long-time development consultant and property manager in Belize.

But that is changing. Prices for many properties have come down dramatically in the past year, estate agents report.

The asking price for Leaf Cay, a 10-hectare island in the Bahamas with its own airstrip and freshwater wells, has been cut from US$12 million (Dh44m) to $8m, according to Private Islands. Savage Jungle, a 536-hectare stretch of rainforest on an island off Chile is now available for $3.5m, down from $7m.

There are also a wide variety of islands available for less than $1.5m, which usually attract the most attention from private buyers.

Typically buyers want a property that is undeveloped, Mr Krolow says. Rather than spend $10m on a developed island, they would rather spend $1m and build their own personal paradise. "People have their own ideas in mind," says Mr Krolow. "They're looking to make their own mark."

But there are challenges and pitfalls to the Robinson Crusoe experience. Any attempt to build requires transporting materials to the site, housing workers and creating infrastructure on a piece of land that may be little more than sand, rock or swamp.

New developments in solar power and water purification technologies make building on an isolated site easier. But it can take years of headaches and expense to arrange building and environmental permits.

An island's value soars if it already has permits in place.

"A lot of people underestimate what it takes to develop an island," says Mr Luppi, who manages Hermit Caye, a private island in Belize that is on the market for $3.3m, down from $4m two years ago.

Belize, a tiny English-speaking nation on the Caribbean coast of Central America, is one of the hot spots of the international islands market.

Dozens of Belizean islands are in private hands, many of them bought before the country, previously known as British Honduras, gained independence in 1981. Other areas with a variety of islands for sale include the Bahamas, Fiji, the rivers and lakes of North America, and the UK.

Sully Island, a 5.8-hectare island off Wales once popular with pirates, is on the market for a mere £95,000 (Dh563,130), down from last year's price of £1.25m. The 0.8-hectare Thorn Island, off the Pembrokeshire coast, is on the market for £750,000. It comes with a Napoleonic fort. Pricing an island is an inexact science, estate agents say. Comparable sales are rarely available to calculate a market price. And many islands are available only for long-term lease.

Furthermore, with a limited group of potential buyers, there is no guarantee that prices will rise anytime soon.

Instead of per-square-metre calculations, the value of an island is often determined by accessibility and the willingness of the owners to sell.

In many cases, these exotic places or rugged pieces of land have been handed down through families for generations. Islands often come up for sale when owners die and their heirs do not have the same interest in the property, or they are sold to generate cash, or because they prove too costly to maintain and develop.

David Moss, owner of Moss Italian Property Consultants, receives a steady flow of inquiries about the handful of islands that pop up for sale in Italy.

"More people are curious than serious buyers," he says "It's a dream that many people have in their heads, but the reality never happens."