The World's Best Private Islands
March 26 -- It happens like clockwork: The economy sours and the luxury market sours with it. Yachts, jewels, art, mansions are suddenly too rich, even for the very rich, to accumulate.
But in the face of a major luxury slowdown, private islands, which can cost as much as $25 million, are still selling quite well.
The price for private islands — which serve as both getaways and novelty investments for wealthy individuals — may have dropped slightly, but brokers who specialize in this market, such as Farhad Vladi of Vladi Private Islands and John Christie of H.G. Christie in the Bahamas, have seen demand hold steady and insist that business may have even picked up in 2001.
According to Christie, his family's Bahamas real estate agency sold two of its large private islands in the last couple months, showing stronger sales than a typical year.
Vladi concurs. On average, he says he sells about 30 to 40 islands a year. Even though Sept. 11 prevented him from showing islands to potential buyers, he says that in the past six months he's seen a 10 percent to 20 percent increase in demand from U.S. buyers, especially for islands in the South Pacific and off the eastern coast of Canada.
The listings themselves tell a different story.
Of the 10 private islands for sale that Forbes.com first profiled over a year ago, nine have yet to find a buyer, and the price of one of the islands dropped by about 35 percent (Bird Cay island in the Bahamas dropped from $5.9 million to $3.85 million).
Market Correction for Private Islands?
This raises the question that if demand is strong, why the bargain prices?
Vladi says it's not unusual for an island to remain on the market for two or three years before it sells, and if the prices have dropped, it's because the private island market — like many other markets — was slightly inflated during the late 1990s when the global economy was booming. In effect, the private island market is seeing a correction.
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