With its turquoise blue waters, white beaches and lush vegetation, homes in Eden Island, a 56-hectare housing and marina development in the Seychelles, should be an easy sell.
“Welcome to your home in Paradise”, reads the slogan on the advertisements, displaying pictures of happy families sailing in yachts.
More than 400 of the 569 apartments and villas have been completed and are already occupied by homeowners or tenants. The first properties were handed over in 2007.
But, despite conforming to every picture postcard image of a tropical island retreat, global economic turbulence is rocking attempts to market the final 69 homes at the residential and commercial marina development, just 200 metres off the coast from the capital island of Mahé.
“The South African market originally accounted for 50 per cent of our sales. But the reality is that the strength of the dollar has affected the South African market. When we were selling in 2008, the rand to the dollar was about six, it’s now 16,” says Peter Smith, Eden Island’s director, who is a South African.
“And when we started selling in Europe, the dollar to the euro was around 1.30 or 1.40, now it’s almost on a parity.”
With the UAE dirham pegged to the US dollar and, therefore, unaffected by currency fluctuations, Eden Island’s developers, like others around the world, are hoping to make up the shortfall in sales with some heavy marketing in Dubai and Abu Dhabi.
Mr Smith also says that the decision to target the UAE comes at a time when interest in the Seychelles is increasing.
Certainly, over the past few years, the UAE government has ploughed billions of dirhams into Africa’s smallest country, which includes Etihad Airways taking a 40 per cent-equity stake in Air Seychelles, Sheikh Khalifa, the President of the UAE, building a large palace in Mahe and Abu Dhabi’s Urban Planning Council making its first international collaboration to produce a Seychelles 2040 plan.
Mr Smith says UAE investors account for 7 per cent of the total number of units sold at the development and 13 per cent by value.
Nonetheless these things do not come cheap. A one-bedroom apartment will set you back about US$500,000 while a six-bedroom villa is on the market for $5.3m.
But that money goes quite a long way on the private estate with perks for each buyer including 24-hour security, a golf buggy to get around (there are no cars on the island), a boat mooring and Seychelles residency for yourself and family.
Q&A
How many people from the UAE visit the Seychelles?
The UAE is the fourth largest inbound tourism market with 13,845 visitor arrivals in 2014 and 21,178 in 2015, which is a 53 per cent increase year on year. Property owners include Sheikh Khalifa, the President of the UAE, who in 2010 built a vast new palace on a former US Air Force base. Etihad signed a tie up in 2012 with the national carrier, Air Seychelles, increasing the number of flights and visitors from the capital.
What do the locals think?
Opinions about international investment are mixed. While some are happy with the increased opportunities and jobs, others blame expatriates for pushing house prices up.
What sort of property rights do they have?
Property is sold freehold and, as an owner you, your spouse and minor children are also invited to apply for residency of, which is available for five years and renewable every five years.
How much of a return can I make?
According to Eden Island, since completion of the first home seven years ago, people have made up to 8 per cent a year growth. The developer also offers two-year rental guarantees on selected properties.
What about tax?
The purchase of a new home is free of any transfer taxes and sanction. However, tax is charged on rental income.
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