With COVID-19 dramatically changing the way people live their lives, the Telegraph decided to investigate the world of secluded private islands and the encouraging demand that we are starting to see from people seeking to live a more isolated lifestyle. Recently, BVI real estate agent Edward Childs spoke with the UK Telegraph regarding BVI real estate data and marketing analysis about the increased number of wealthy individuals considering the purchase and development of private islands.
The article entitled, What Richard Branson ‘mortgaging’ Necker Island means. In the article, author, Zoe Dare Hall explains, “Why do the ultra-rich get ‘quite creative’ when it comes to attaching value to a non-financial asset?”
Edward Childs from Smiths Gore BVI has a keen insight into the BVI property market and the new behaviors that are currently emerging. ‘People think that if there’s a second or third wave of the pandemic, or if this becomes a permanent part of the way we operate from now on, they want to feel safe on a low-density, accessible islands’ Ideally one where they can batten down the hatches, close the borders and hideaway in the own private haven.
‘People are lined up now to look at private islands as soon as the lockdowns are lifted. They’re thinking ‘If we get another pandemic, where can we go’ Says John Christie from HG Christie in the Bahamas.
Should a buyer want or need a mortgage to finance their purchase? Most likely, because they are looking to develop the island commercially – ‘financing institutions would generally apply the same risk criteria against an island as any other real estate’ comments Edward Childs from Smiths Gore, the BVI real estate agency that sold Necker Island to Branson in 1979.
Lenders Concerned over Liquidity
But lenders would assess the risk associated with the asset – including the ability to dispose of it in the case of default – and islands aren’t an easy sell. They usually sit on the market for two to 10 years, says de Mallet Morgan, and those needing renovation, or that come with 100-plus acres of land can be a deterrent to buyers. ‘If you need to get your family out of the public eye, or you don’t want to be in a house in a big global city, you want to be on your private island as quickly as possible’ he says. ‘It takes two days to reach French Polynesia from the UK but just nine hours to the Caribbean and far less from the US. The luxury or ability to reconnect and disconnect is a big deal.’
Does the COVID-19 Threat justify the Cost of a Private Island?
‘What price is a port in a storm, though?’ Edward Childs reports a ‘definite rise’ in the number of inquiries for a private island in recent weeks. ‘At the $10m+ level, there are as many Europeans as there are Americans. At the bread and butter $2m level, it’s mainly Americans.