Going cheap: rich and famous sell off islands
By Alex Brooks | smh.com.au | 10 May
Celebrity island owners: Mel Gibson, Kylie Minogue and Johnny Depp.
Luxury island getaways have plunged in price and are flooding the property market, prompting predictions the value of mainland housing will follow.
Once regarded as the ultimate asset of the rich and famous, up to 40 islands are now for sale around Australia - most off Queensland.
So keen are owners to sell that some have halved their prices, a trend property pessimist Steve Keen believes will soon be mirrored in the suburbs of Sydney and elsewhere.
The University of Western Sydney associate professor famously claimed Australian property prices would fall 40 per cent, even before the global financial crisis hit.
"This is only the beginning," said Associate Professor Keen, who publishes the Debtwatch blog, read by up to 12,000 people a day. "Australia has 1½ times the property overvaluation that the United States has.
"Islands are Ponzi trophies for the wankers and finance marketeers that paid themselves a fortune for ripping people off and calling it wealth creation." (A Ponzi is a kind of pyramid scheme.)
"There are two reasons islands will fall in price: one is the people who have yachts are too busy selling them to sail to their island and the other is that people are holidaying in Gosford, not Hamilton Island."
The Voyages tourism group has closed expressions of interest to sell its island resorts - Bedarra, Dunk, Brampton, Wilson, Lizard and Heron islands - while Hinchinbrook and Daydream islands are also on the market.
Jones Lang LaSalle Hotels agent Peter Harper has been handling the sale of the Voyages resorts and says they will all sell, but not for their 2007 valuations of $51.8 million for Dunk Island and $35.6 million for Wilson and Heron islands.
"The market went soft prior to the global meltdown," said Coldwell Banker Capricorn Coast principal Richard Vanhoff. There are 17 private and 40 leasehold islands along the Queensland coast.
Germany-based island broker Farhad Vladi, who has sold 2000 private islands, blames speculators for the free fall in most island prices. "Quality islands are not affected, but the islands which are like ping-pong balls between speculators are having problems."
Mr Vladi said celebrities were steering away from islands because they find too many security risks if fans discovered the hideaways: "They can have a fantastic holiday and have none of the problems of managing an island."
Mr Vanhoff agrees. Even though actor Julia Roberts wanted to buy Turtle Island, he says most island owners were simply business people who want a private getaway.
Celebrity isles
Johnny Depp
Owns Little Halls Pond Cay in the Bahamas, which he calls F*** Off Island.
Nicolas Cage
The actor has an island in the Exumas, also located in the Bahamas.
Mel Gibson
Owns Mago Island in Fiji, which he bought to take his large family on holidays.
Sean Howard
The OzEmail internet tycoon owns Double Island off the coast near Cairns.
Kylie Minogue
The pop star sold her solarpowered retreat on French Island, Victoria, for more than $1 million.
Richard Branson
The Virgin founder owns two islands, as well as Makepeace Island in Noosa which he is turning into a $4 million staff resort.
First published by Smh.com.au on May 10 2009
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