WITH our idyllic beaches, tropical climate, and recent economic growth, it’s not hard to see why Fiji is fast becoming a magnet for international property developers. In recent years, buyers from Australia, New Zealand, the USA and China have reportedly been snapping up properties across the country.
“Land prices here have doubled in two years,” according to Michael Lucas, the New Zealand developer of Vunabaka, an island resort on Malolo, off the coral coast.
As a result, the property industry has recently been plagued by concerns of housing affordability, or, as results of the latest Fiji Real Estate Survey by Property.com.fj indicate, unaffordability.
A majority (52 per cent) of survey respondents claimed that housing in Fiji is moderately or very unaffordable, while only 48 per cent found that it was either moderately affordable or affordable.
Unsurprisingly, calls for decreases to housing prices were echoed by respondents, and general sentiments indicated that many feel as if only very wealthy individuals and overseas investors could afford local property prices.
“Prices of properties are sky-rocketing, [and] locals are highly affected. This has to be regulated,” lamented one respondent.
In fact, the margin that most respondents (37 per cent) indicated they were willing to spend on a property was between $100,000 and $300,000 – the minimal range offered in the survey. This was followed by 35 per cent who stated they were looking to spend less than $100,000, and 17 per cent who opted for property priced between $300,000-$500,000.
“House and land prices are constantly increasing at an exponential rate, whereas the salar[ies] of locals have barely moved from the last 10 years,” complained one respondent.
“Average working Fijians cannot afford to buy a property…. propert[ies] are well overpriced. New Zealand and Australia are cheaper, and the build quality is much higher, with less Government taxes.”
In fact, survey respondents rated lowly for property ownership, with only 29 per cent owning property, most of whom have a bank mortgage.
Survey results show that a majority (41 per cent) of Fijians reside in rental properties by themselves or with people they know, while only 37 per cent live in their own home. The remaining 22 per cent either stay with their parents, or reside in temporary accommodation, or a shared household, typically with people they previously did not know, and contributed to rent payments.
Low property ownership levels are further reflected in the low number of survey respondents who have house insurance. The majority (58 per cent) of respondents are uninsured, while the remaining 42 per cent stated that they do have house insurance.
Most of the insured home owners (61 per cent) insured with providers other than TOWER Insurance, Sun Insurance, Dominion and AON, although Sun Insurance ranked highest of the four, followed by TOWER, Dominion and AON.
Destruction of an estimated 40,000 homes during TC Winston in February, for which the Fijian government was required to disperse some $88 million in support for uninsured home-owners, has also spurred more incentive for insurance agencies to develop more products and packages suited to the socio-economic needs of residents outside major municipalities.
Housing regulation has been a key demand from survey respondents, with many calling for an effective price regulation scheme attuned to local income, and a stop to overvaluation of properties.
Much of these concerns will likely be addressed through the adoption of international valuation standards by the Institute of Valuations and Estate Management of Fiji and the formulation of a Land Valuation Act to regulate valuation practices and the property market, as announced by Lands Minister Faiyaz Koya in late October ∎
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