Friday, September 15, 2006

Savusavu expatriates and prices

Savusavu’s expatriate community upping prices

A friend from Labasa drove us along the coast east of Savusavu to see the developments there, numerous fine houses and some resorts. Who lives there I wondered. Apparently there are pieces of freehold land being sold on the internet and Americans and others are finding solace in the quietness of this coastal area, not only yachties. And their presence is impacting upon the prices of land and services and ordinary food. And the community want the Savusavu airport upgraded - but I like the ferry better than the little plane!

From Fiji sun Sept 15
Millionaires pose threat to the poorTown’s trade in US dollars raises prices
Locals in a growing tourist town are feeling the pinch of paying high prices of goods and services brought on by the influence of the American currency. Villagers are forced to pay skyrocketing prices meant for the rich who have made Savusavu their home. And the Savusavu Chamber of Commerce has called on the Government to investigate the quick-buck dealings of those who, it claimed, are millionaires who have flourished the real estate markets at their own prices.

The chamber said the rich have controlled the prices in trading without taking into consideration the suffering of local villagers. Sixty per cent of freehold land is owned by Americans in Fiji’s Hidden Paradise where about 100 expatriates live full-time. “It is high time that the Government steps in and conducts an investigation on how these so-called millionaires come into the country and make a quick buck and leave the country without putting any single cent behind,” said chamber acting chairman, Elenoa Weatherall.

Mrs Weatherall said with the boom in the tourist industry and the continuous increase of prices of goods and services, locals would always be disadvantaged. “Tourists will come and go but the grassroots are feeling that insurmountable pain,” said Mrs Weatherfall. “I mean, if you want to make business in Savusavu, you have to take into consideration the needs of the locals and that is not happening here.”

Food sold in supermarkets and restaurant top the list with customers having to pay double of what they can spend in other towns and cities. She said a customer could spend close to $10 for a serve of food from a restaurant, which is 50 per cent more of what they could pay in a restaurant in Suva. Services such as the Internet are also paid for at a high price with most outlets trading at a price of $8-$10 an hour. In other urban centres, people only pay $3 for internet use, Mrs Weatherall said.

She said the prices of land offered by real estates agents was alarming and only targeted the rich. Prime residential lots are currently sold at a hefty price of $250,000 to $500,000. “I think it’s about time the Government steps in and stop the outflow of money overseas at the expense of the locals. No percentage of the sale is left behind for the locals and that is a bit unfair,” she added. Taxi driver Mahendra Reddy said he had been longing to buy a freehold lot for his grown-up children but had to shelve the plan.“The price is too high and purchasing one is only a dream,” said Mr Reddy. Mrs Weatherall called the Prices of Income Board to monitor the prices of goods in Savusavu.

Mayor Ram Pillai said he had warned his people not to sell their land. “What will happen to the locals if all the land is bought by people overseas? Savusavu is filled with freehold land but there is a limited amount now available. It now costs $300,000 for an acre. People pay the same to buy a house and land in Australia or New Zealand,” he said. “Prices of food like fish, prawns and vegetables have also gone up. We buy 80 per cent of vegetables from Labasa and Suva because people here no longer plant.” Senator Setefano Osonamoli, said in statement made in Parliament, that land sales are made by overseas agents who are not subject to our controls and are advertising on the Internet.


Pandabonium said...

I've seen this happen more than once in Hawaii. It came and receded like waves on the shore over a long period of time. First it was Californians, then Canadians, then Japanese, then the the general US real estate bubble. Each time it has made it harder for local people to make a living and a lot of kids born and raised there have left for jobs on the mainland.

I'm not sure how people are making money off of this. My understanding is that there is a 33% capital gains tax on unimproved land. Perhaps they are building a house then reselling, which avoids that.

Having to compete with them for food at the market is not good. When K and visited Savusavu a few years ago, I was pretty turned off by what had already changed in the town businesses, with internet cafes and touristy restaurants.

I think it will pass soon when the US ecconomy and real estate bubble bursts - I predict that will be sooner rather than later. I accurately predicted the same for the Japan driven bubble in Hawaii that burst in 1991.

Any locals care to come to Taveuni? I have two lots of about an acre available for a fraction of the price quoted in this article. But I don't think its the lot prices that affect local people as much as the daily necessities.

Pandabonium said...

As for planes vs ferries, the latter are not a terribly safe and reliable form of transportation going by statistics. They haven't had a big accident yet in Fiji, but I've heard many stories about breakdowns. A sound ferry system does serve the local population better as it offers low cost transport for both people and especially goods. Perhaps money would be better spent on that than runway improvements.

Trouble is, money talks, and right now they are chasing tourist dollars rather than thinking longer term for the overall infrastructure needs of the country.

Anonymous said...

It is simply not possible to buy and sell land in Fiji over the internet. This is simply an untruth. All non-resident buyers are required to gain Ministerial Consent from the Minister for Lands for each and every land dealing in Fiji. There is simply no other way. Each applicant must furnish a very detailed application that even includes a police clearance from their country of residence. Expatriates also have no influence on the cost of goods in the North, this is simply a factor of higher transportation costs ie higher fuel prices, that make it more expensive to transport items.

As to fixing prices, well the current pricing is simply a factor of supply and demand. There is a great demand for freehold property in Savusavu due to its unique natural and cultural attributes that continues to drive interest in property there.

On taxes, Fiji does not have a capital gains tax, what is applied to real estate dealings is Land Sales Tax or Income Tax. Both rates are 31%. In simple terms if you sell land in Fiji you are required to get a tax clearance from Inland Revenue for both Land Sales Tax or Income Tax as one or the other may apply but not both.

The reality is that Fiji has become a destination of interest for many expatriates who are trying to get away from the so called first world and live in a more natural and culturally interactive location.

It is what brought me to Fiji seven years ago and what keeps me here. I simply love the place and its people.

Pandabonium said...

I would have to agree with what anonymous said. Perhaps the article would be more accurate if it had said that land is "marketed" via the internet. As pointed out by anonymous, requires a proceedure which in my experience takes many months to complete. My mistake on the tax, thanks.

Still, the effect of this is not always positive on a small community which cannot absorb the rapid influx of funds and therefore experiences price inflation.

Glad to hear other people have the same reason for choosing Fiji as I do.

Peceli and Wendy's Blog said...

Thank you Panda and Anonymous for your comments and you both know more than I do about real estate. The journalists who wrote the article should have said 'advertised' on the internet.
Yes, I'm sure bureacracy is slow when someone wants to buy land and build a house in Savusavu.

But the main premise remains - there is an impact on prices, not only because of location, but by the presence of 'rich' or people perceived toa be rich.

Of course Savusavu has had a long history of a kind of class system - the planters and the villagers. On a ferry ride - here we go again - another Adi Savusavu story - there were three women who were so snobbish on the ferry that I really cringed. They were from Savusavu Part-European families!

George said...

I think its good that more money is going to Savusavu but for sure it is more expensive then labasa.

I remember a trip there two months ago and was suprised at the cost of a curry at a small indian restaurant like what is found in labasa.

Also the carrier driver that took us from Savusavu to Labasa was from our area and commented that a lot of people from labasa are working savusavu because of the better wages.

Hopefully going forward some of the investors in Savusavu will have a positive finiancial affect on other areas like labasa.

Peceli and Wendy's Blog said...

If Vanua Levu is to really encourage short-term visitors and long-term stayers, then a few things need to happen. The planes and the ferries ought to run on time! There needs to be excellent back-packer type of accommodation as well as others. Walking trails across the mountains could be developed with stopovers in villages. Even eco-tourist huts along the way. It's very beautiful crossing Vanua Levu but hardly anyone knows that.

Anonymous said...


yes you can buy lots via the internet. Reputable agents like David Miller from can help you.

I bought 2 years ago, and flew in February to go and see my stand. It is there, as is my deed. These guys obtain blanket consents from the ministry of lands.

Kivalagi said...

One thing that everyone seems to forget is that 87% of the land in Fiji is held in trust for the local Fijians. This means that there is only 13% (or less) of the land that is actually available for sale (freehold). This is true even if you are a resident or citizen of Fiji. The Indian population (49%) here in Fiji does not see any of the benefits from this "Trust" land however and they are required to purchase freehold land if they want to own their own land. Many Indians simply lease land from the Fijians for 99 years and hope that they can get the lease renewed somewhere down the road.

Having lived in Savusavu for the last 5 years and owning property here I feel that much of the criticism from Ms. Weatherall is simply unwarranted and possibly results from jealousy. Land owners here employ many of the locals for various duties on their property and most purchase building materials locally and have local builders construct their homes. The trickle down effect from these purchases and employment are realized by a large number of the locals and have helped to contribute to a general increase in everyone's standard of living. The local villagers, who by the way do not have to worry about land, also see an increase in their standard of living. Many of the villages now have telephone and internet services, electricity, satellite TV and better roads to their villages. With the influx of new people here I've seen many more free medical clinics, dental clinics and eye clinics offered each year. These are free to everyone and are performed by top rated doctors from all over the world. Most of these clinics are organized and supported by the people purchasing land and visiting here. I have a friend here who is in Rotary International and spends many of his days upgrading the water systems, computers at the schools and housing for handicapped locals. All of this is done at no cost to the locals and nothing is expected in return. I should also mention that they have much more opportunity for employment than they had before.

For Pandabonium to think that these trends will pass soon is ridiculous to say the least. Just because real estate cycles come and go doesn't mean that the area is returned to it's past state. I seriously doubt that Hawaii has gone backward during any of it's boom and bust cycles. I do notice that she is trying to hawk her 2 parcels of land in Taveuni "for a fraction of the price quoted in the article". Taveuni has no central electricity, no large towns and is even more difficult to get to than Savusavu. Having said all of that, I do love Taveuni and always enjoy going there.

Good luck with your land sale pandabonium.

Peceli and Wendy's Blog said...

Thank you kaivavalagi for contributing to this discussion about Savusavu. I am not intimately connected to Savusavu, except to tease friends from there as 'high tide'. Our family only pass through on our way to Labasa via the Adi Savusavu or Sofi and some stay one night in a hotel there. Some of the men in our Fiji family do work in Savusavu.
There are many points of view here. I think the main thrust of Mrs Weatherell's statement is that local Indians who want to buy land find that the prices have been inflated because overseas people are willing to pay huge prices for freehold land.
I certainly take your point though that many visitors/newcomers do contribute to the life of the community. I know that Rotary and volunteers do great work in the Savusavu district. One of my friends, an Australian nurse is inspiring in the way she helps in many villages in Cakaudrove.

kiramatali shah said...

Experts have talked about this before. How many times have you read about the importance of ‘adding value’ for your audience? How many times have you read about ‘building trust’ with your readers/prospects?
Many, many times. You know it well. Every marketing guru has spoken about this topic. I’m sick of hearing it. But it STILL bears repeating.

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