Melbourne-based Computershare Ltd founder, Chris Morris, recently bought Queensland’s Orpheus Island (Goolboddi), situated off the North-East coast of Australia on the Great Barrier Reef, 190km from Cairns and 80km (a half hour flight) from Townsville. Morris would not disclose his final price, but is said to have purchased the island for below AUD 10 million, even though it last sold for AUD 15 million three years ago. This appears to align with recent island pricing trends in the country. Australian island owners were affected in 2009 with islands selling for half their market price. Late into 2010 and early 2011 there were still some ‘bargain’ islands, with more than a dozen Australian islands on the market, selling for significantly less than their purchase price.
A sign of the times? Perhaps – or a niche market
Are these prices due to the recession or simply the spontaneous and somewhat novel island market? Orpheus Island and the 30 or so islands of recent ‘bargain’ sales are only a handful of Australia’s 8,222 island properties within the country’s states and territories. Sales have been driven by a range of factors including: new generations not interested in taking on family owned islands, the costs and maintenance associated with island ownership, and the fact that some of the bigger sales were driven by banks foreclosing on larger loans.
Unlike some property markets, it can be quite common for islands to change hands every two to three years. The demand for Australian islands is still apparent. Orpheus Island received over 150 enquiries from the UK, Asia, New Zealand, though most were local enquiries from Australians. It is encouraging to see the local investment and interest in supporting the country’s tourism and indigenous people. Morris has also acknowledged the importance of this by implementing hospitality training for the local indigenous people and engaging them in the business and resort’s culture on his new island. Many Australian resorts have also recently invested millions to upgrade and renovate their facilities, such as the company Mulpha Australia’s Hayman Island in the Whitsundays, which spent around AUD 40m on improvements.
Free-spirited island market
The island market at a glance could be likened to a free spirit, with trends difficult to track since they are as ambiguous as those who pursue the market; each owner or investor has very unique ambitions for his or her island.
With the recession in our wake and Australia’s dollar pushing strong, it will be interesting to watch this space and see how prices and island purchases evolve. Did Morris catch the last bargain in Australian island real estate or is this another dip in a continually adjusting market?
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