Investing in Fiji’s Real Estate: Current Issues and Opportunities
By Biscommedia
()
About this ebook
An excellent, concise and much-needed analysis of the general requirements for investing in Fiji’s dynamic real estate market. It covers most aspects of technical data required to make informed decisions before any expert advice would be required.
Full of proven insights, time-honoured wisdom and valuable data, this book brings together critical information from various sources for the benefit of often information starved foreign and local investors, professionals, real estate agents, developers, students and general readers.
After a brief history, the book systematically unravels the hidden dimensions of land issues, and proceeds to highlight the key requirements for living and investing in Fiji’s real estate, without avoiding the informational needs on critical aspects of financing, taxation, legislative challenges and government policies which impact all economic activities. Various appendices are invaluable and serve as useful resource materials for the novices to navigate their way around what may seem like a remote and difficult market at first glance.
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Investing in Fiji’s Real Estate - Biscommedia
Fiji Islands in Brief
Name: Republic of Fiji
Location: latitude 18.1667° S and longitude 178.4500° E
Area: 18,274 square kilometers or 7056 square miles
Capital: Suva
Currency: Fijian dollar (F$)
Time zone: 12 hours ahead of Greenwich Mean Time (GMT)
Calling to country code: + 679
Calling from country code: 00
ISO 3166 code: FJ
Internet TLD: .fj
Population: 870,000 - estimate 2014 (2007 Census 837,271)
Languages: English (official), Fijian, Hindustani and Rotuman
Climate: mostly tropical with high temperatures all year round
Economy: reliant on tourism, sugar, timber, fishing and gold mining
Annual GDP Growth Rate: 2.5% (currently)
Credit rating: currently Standard & Poor’s at B but Moody’s at B1.
Literacy: ≥ 93%. Education is compulsory and free up to age 16
Chapter 1
Historical and Economic Environment in Brief
Few people are fully aware that a New Land Rush is taking place on a global scale. Its pace is frantic but you would hardly notice it, unless you went about looking for it. It gathered momentum by the turn of the 21st century due to the dire predictions about climate change, an unsustainable level of global population (about 7.5 billion people) and the potential for conflicts or regional instability arising from the global movement of people, refugees, terrorism, etc. Some countries have already experienced instability due to food shortages whilst many others suffer from poor governance, localised feuds and ethnic tensions.
These challenges have caught the attention of not only the stakeholders in international agribusinesses, but unavoidably the governments of some small island developing states (SIDS) in the Pacific, which are prone to inundation due to climate change and, therefore, keen to secure suitable parcels of agricultural lands for food security. The New Land Rush is further exacerbated by the demand from developers and investors seeking prime coastal lands for residential or retirement living all over the world.
Fiji has not been sheltered from the current flurry of global demand for land. The impact of climate change in Fiji is not quite as dramatic as in some other parts of the Pacific. Some low-lying Pacific SIDS are already beginning to feel the fallout from climate change as sea levels continue to rise. For example, in February 2013, the government of Kiribati offered to buy about 6,000 acres of land near Savusavu for its food security.¹ For the most part, though, the new land rush in Fiji is reasonably contained and self-induced; more akin to a second Great Fiji Rush
aimed at enticing to the country a new wave of people from the same source countries as was the case during the first Great Fiji Rush
.
The first wave of settlers arrived in Fiji during the late 1860s, due to the demand for cotton (which could be easily grown in Fiji) fuelled by the destruction of cotton plantations during the American Civil War (1861-1865). The surplus capital derived from the 1850s gold rushes in Victoria and other colonial outposts poured into Fiji, and the land grab was on – not quite like the Great Land Rush
of 1885, 1889 and 1893 in Oklahoma – but it had its own set of peculiarities, often leading to unlawful securing of land titles. The observations of the US consul in Fiji, in 1868, give us some insights into what actually happened: Large tracts of land and, not infrequently whole islands, have been purchased for a comparatively nominal consideration, a few trinkets, jews-harps, old-muskets, a few bullets or little lead and powder, a few yards of cotton cloth, even empty bottles and articles of like value….
He went on to denounce some unscrupulous practices which were common at the time: …frequently the lands are sold twice or oftener by the same grants or by different chiefs claiming rights to the same lands…. Lands are sold by one white man to another under a pretended title and application is made by the real native owner for the restoration of possession.
²During the British colonial administration in Fiji, these lands were eventually alienated from the bulk of the communally-held, so-called native lands and declared freehold titles for the benefit of white settlers. At the time, they were a small but ruthlessly powerful minority who had effective control of and ran the government of the day. Other forms of exploitation of the native owners were not uncommon.³
The second wave Great Fiji Rush
currently underway is centred largely on the residual freehold titles in the hands of the descendants of first white settlers, many of whom are now divesting wholly or partly their land holdings to capitalize on the strong global demand. A few Indo-Fijians are doing the same with some smaller holdings they acquired later as free settlers. They market their properties almost exclusively to offshore buyers via the internet; thus, their advertising campaigns generally bypass much of the local focus. This has fuelled a new kind of land boom, and over the last decade in particular, astute buyers and developers have made huge returns on their investments. The hotspot precincts are located in Savusavu, Taveuni, Macuata Coast, Denarau and the West coast, the Voli Voli area on the Sunset Coast, the Coral Coast, the Yasawas, the Mamanucas, a few major islands in Lomaiviti, and in many privately-held islands by the rich and famous. By and large, the atypical price rises in recent years are attributable to:
•Scarcity of available freeholds.
•A surge in expatriate interest in freeholds.
•Security of tenure offered by freehold and state-owned lands.
•Unusually favorable exchange rates for foreign investors.
•Influx of cash-rich baby boomers nearing retirement.
•Ability of foreigners to raise necessary offshore capital to fund acquisitions, unlike the disadvantaged local buyers.
•Promotion of sought after buy-to-let-properties close to the tourist precincts by the developers, mostly to the foreigners.
•Government’s commitment to the continued growth of Fiji’s tourism sector and associated tax or investment incentives.
•The restoration of greater confidence in governance and stability due to considerable tangible progress towards a return to democracy instituted by the Bainimarama regime.
Over the last twenty-seven years, Fiji has experienced tremendous economic