Celebs and ultra-wealthy still love the balmy allure of a private island
Online searches for private islands have more than doubled in recent years, according to luxury real estate brokers. While brokers admit that online sites don’t only attract serious buyers, but also a fair number of daydreamers, private island sales have increased noticeably during the past four to five years.
At the height of the global property boom during the mid-2000s, numerous celebrities purchased private islands – including Mel Gibson and Eddie Murphy, who bought islands for $15m each while Johnny Depp bought an island in the Bahamas for $3.6m. During this period, several private island owners, who were eager to take advantage of buoyant market conditions, put their properties on the market at unrealistically high prices.
However, the global property market crash in 2008 caused private island prices to plummet.
This reduction in prices has ultimately helped spark renewed interest among potential buyers. Brokers note that market trends for private islands are reflected more in the price changes than in the number of islands sold from one year to the next.
With prices still relatively low by historical standards, nature conservancy groups and governments have been able to step in and buy islands.
More affordable private-island markets are also emerging in places like Belize – home to the second-largest barrier reef in the world. Belize, on the eastern coast of Central America, remains an undervalued market.
“The rental market for private islands is picking up enormously, moving the market from real estate to tourism.”
Despite the current recovery in buyer interest, this niche market has yet to return to its pre-recession highs. It seems wealthy millennials may be a key factor preventing residential private island sales from returning to their pre-crash levels – since many younger ultra-wealthy buyers prefer to rent private islands rather than buy them.
Today, most island buyers are 50 years or older, while people in their 30s and 40s prefer to rent for a couple of weeks at a time. The rental market for private islands is picking up enormously, moving the market from real estate to tourism.
Canada, the US and portions of the Caribbean and Central America are currently the hot spots for those looking to buy islands for vacation getaways. Luxury online sites offer private islands that range in price from a Tahiti islet for $256 000 (R3.5m) to a 26-acre island in the Florida Keys for $95m (R1.3bn). In contrast, the world’s cheapest islands are available on Canada’s east coast, with islands in Nova Scotia available for as little as $50 000 (R677 000).
Posted by The Know - Pam Golding Properties