VANUATU – Voted the “happiest place on the planet” for the second time!

Real estate in Vanuatu is a shining light in the current world economic landscape. Factors that influence Vanuatu real estate prices are all positive. These include land laws, tax laws, tourist arrival figures, political stability, and of course, rental rates for local residential real estate.

Vanuatu is currently the land of opportunity for real estate investing. There is considerable growth evident and opportunities for viable commercial and hospitality projects. Predictions are that we will be short on hotel rooms in the next couple of years.

If you are considering offshore investments, you should seriously consider investing in Vanuatu real estate – residential, commercial, industrial and subdivisions. You will therefore need to know as much as you can about the local situation.

Likewise, investing in beautiful beachfront escapes will give you an enviable lifestyle at a fraction of the cost in Australia, New Zealand or the USA.

In recent years, most of the investment in Vanuatu real estate has been from Australia and New Zealand. Those who had the foresight to invest and develop Vanuatu land for projects approved by the government have made considerable returns.

By considerable, I mean what most of us would consider small fortunes! Remember, in these cases fortune favours the brave – and the knowledgeable.

There is a growing awareness of Vanuatu as a safe exotic tourist destination only 2-1/2 hours from Brisbane. This is a lot closer than Bali, which is 6 hours from Brisbane and has also been the scene of two horrific bombings targeting Westerners. This safety aspect is of even more importance after the second Bali bombing in Indonesia in 2005.

The Vanuatu people are warm and friendly and their culture is that of an exotic South Pacific island which to many is the image of Paradise itself. The introduction of flights by Virgin Pacific from Australia and New Zealand is another indicator of the growing importance of tourism in Vanuatu.

The most important factor influencing real estate in Vanuatu is that foreigners can now in fact own properties in Vanuatu without restrictions. A foreign citizen may have to show a financial reference and a professional reference for urban purchases but apart from that there are no distinctions between foreigners and locals. Foreigners can even own businesses once they have the approval of the Vanuatu Investment Promotion Authority (VIPA).

Ownership of land in Vanuatu is either by customary land ownership rights or leases up to 75 years. There is no freehold title which is the standard for other island nations such as Hawaii.

When you buy an existing lease, you only purchase the remaining term, not a new 50 or 75 year term. However, even if you purchase a lease with less than 75 years remaining, there is an automatic option for you to extend it to the full 50 or 75 years.

Nowadays, the land laws in place are based on British law and the government is encouraging development and residency in Vanuatu. There is no restriction on ownership or ownership transference of real estate in Vanuatu. The monies realized from the sale of your Vanuatu real estate, including the tax-free capital gains, can be transferred out of the country in any currency you wish.

In comparison with Australia, the real estate in Vanuatu is of exceptional value, especially in absolute beachfront properties. There is solid growth in commercial properties in Vanuatu, especially around Port Vila’s main street. There is also a need for Vanuatu rentals for government and aid workers. Rent of residential properties can be positively geared returning 10% to 15% p.a.

GROWTH AREAS

Commercial
Commercial property along the main street and the central CBD of Port Vila has achieved significant growth in the last 2 years and more can be expected in the future. Demand for commercial space will grow as the tourist market grows. Shops and restaurants targeting tourists will be able to pay more than local based business.

Any Australian who takes one look at Port Vila will see the potential. Bear in mind that Vanautu is a Christian English speaking country only 2/12 hours from Brisbane. I won’t say it will be the next Noosa in Queensland or Lahaina in Maui, but it easy to imagine more restaurants and coffee shops in the town centre. Eating out is not cheap in Port Vila. As you can imagine, quite a lot has to be imported. However, it could well become an upscale location with incredible natural beauty.

Residential
Residential areas around Port Vila have the highest potential for growth. Beachfront and harbour frontage have seen double-digit growth in the last 3 years.

Absolute beach frontage in Vanuatu is still considerably less expensive than Australia and this beach frontage is sensational. There exists an amazing diversity in beachfront character that does not exist in continental Australia. In Vanuatu, the beach can as white as the Whitsunday Islands or as black as the Kona side of the Big Island in Hawaii. It can also consist of fine or coarse sand or coral or a combination of all three.

In 2010 the ring road around the island was completed. Sponsored by the US government as a reward for good governance, the upgraded road has opened up a lot more areas for coastal development. On the east coast there is Manuro Shores, Eton Beach and Lazuli Resort. On the north and western sides we have Siviri and Lawia Estates.

There are already well established developments at Tassiriki, Elluk , First and Second Lagoons, Bellevue and newer beachfront developments at Pango and Mele Point.

There are a large number of aid organizations and private companies looking for suitable housing for their employees on term rental agreements of between 1to 3 years. There is a current shortage of one or two bedroom self-contained units for rent. However, this could change with the recent introduction of strata title laws similar to the Australian state of Queeensland. So now existing buildings can be changed to strata title and new offices or units can be strata titled. There will be an increase in apartments with management rights similar to Australia.

TOURISM & REAL ESTATE

If you are mainly interested in investing in Vanuatu real estate for capital gains, then an understanding of the current tourism position is essential. It is this sector that will fuel Vanuatu real estate growth. Commercial investments are fuelled by competition in the commercial rental market. As more tourists arrive, the competition for office and shop space in Port Vila will increase as companies move in to service these tourists.

The tourist sector is a major earner of foreign currency for Vanuatu and is recognized by the Government as a key sector of development. The Government has targeted this sector for growth and has made it easy for tourist development by foreign companies. The majority of the population in Vanutau is under 25 years of age. Tourism is the sector recognized to have the best potential to provide for their employment.

Currently, most marketing initiatives are by individuals in the private sector. With continued public sector and economic reform, tourism can only increase.

There has been an increase in new boutique style hotels and bungalows.The first fully managed self-contained apartment resort is now selling off the plan at NASAMA RESORT in Pango. Contact Professionals Vanuatu for more information.

Forecasts on tourism are positive following the arrival of Pacific Blue into the aviation market in September 2004. The result was an increase in air arrivals by 20% in the first six months of operation. Recent appraisals have indicated that Vanuatu will soon be short of hotel rooms and holiday rentals. All this indicates a rosy future for investing in Vanuatu!