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Jul 18
Why there’s Never Been a Better Time to Buy a Private Island
In times of economic turmoil, sales of high-end goods always plummet the first and take the hardest hit. It’s the discretionary luxuries- designer clothing, flashy cars, holiday villas- that inevitably wind up on the chopping block when the markets take a nosedive and even the most bullish investors are holding their breath. Yet arguably the most extravagant luxury that money can buy, privately-owned islands are seeing a surge in interest right in the midst of one of the biggest economic crisis of the last decades. Found anywhere from the snowy Great Lakes to exotic Fiji and Panama, these unique properties offer investment possibilities unlike any other kind of real estate… and now also at unheard-of prices.
The CEO of leading islands firm Private Islands Inc, Chris Krolow, says that while his company has seen a huge number of price reductions in the Fall of 2008, in his experience it’s been a result of sellers needing a quick sale to make up for other losses, as opposed to an actual drop in the island’s value. “In my ten years in this business, I haven’t seen a better time for buyers to get some amazing deals on very desirable properties,” he says. “We’re seeing substantial cuts in prices- sometimes by half or more- by motivated sellers who’ve had their portfolios hit by the credit crisis. We’ve even added a section on our listing website, Private Islands Online, just for new price reductions.” And he says that since the private island market has such a strong history of appreciating faster than any other kind of real estate, those who make savvy purchases now may be in an excellent position to sell when the markets rebound.
So what should investors look for when adding a private island to their portfolio? When it comes to tropical islands, the best prospects for major future leaps in value are always in areas with high rates of tourism and a substantial infrastructure. A safe environment and the availability of amenities like hospitals, airports and shopping are important, as is a relative proximity to the Unites States, where the majority of island buyers reside. With the strongest tourism sector in Latin America and the fastest growing economy in the world, islands in Panama have become highly desirable for the construction of resorts and residential developments, ranging in price from several million down to just US $30K. Pricier but still always in high demand are properties in the Bahamas, where the market is fuelled by high tourism and the celebrity cache of local island owners like Johnny Depp, Nicholas Cage and Faith Hill. Closer to home, good buys can be found in areas like Maine and Canada’s Nova Scotia, where seasonal holiday properties are achieving a strong following among urbanites from East Coast cities like New York, Washington and Boston.
But the opportunities of this elite market have remained a secret to many investors. During the last months, Krolow says a main focus for his company has been simply spreading the word that his niche of luxury real estate even exists, and promoting the benefits of island purchase to both professional investors and the average client looking for a smart buy on a vacation property. “We’re actually very fortunate,” he says, “because unlike most sectors of real estate where there’ve been an excessive boom in construction over the last five years, ours is truly a finite market of maybe 800 properties up for grabs each year. When it comes to natural private islands, they just aren’t making any more of them.”
View Luxury Living International’s elite selection of luxury properties and private islands here.
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