JUST off the west coast of Florida lies the sun-drenched island of Little Bokeelia. It is blessed with cascading waterfalls, tennis courts, pools and a Spanish-style villa. Despite such enticing features, the island languished on the market for three years, before selling in July for a mere $14.5m—half the original asking price.
Little Bokeelia is not the only island that is proving hard to shift. In the Bahamas, where prices per acre are among the world’s highest, hundreds of atolls lie unbought. The price of undeveloped islands, which make up around 80% of the market, has dropped roughly by half since the financial crisis, says Farhad Vladi, a private-island broker.
In the early 2000s private islands were the trophy of choice for millionaires but the recession sapped demand. Building on an island is much pricier than on a mainland plot, and there are many potential pitfalls. It is not for the faint-hearted, says Edward Childs of Smiths Gore, an estate agent in the British Virgin Islands. Mega-yachts and private jets are seen as more predictable investments. As a result private islands can be surprisingly inexpensive (see left-hand chart).
But low prices have helped a new type of client to enter the market. Governments and NGOs acquired around 60 islands between 2011 and 2014, mainly in North America, up from 22 in the four years before (see right-hand chart), according to numbers compiled by Mr Vladi. They plump for undeveloped islands, which are cheaper and more pristine than built-up ones.
Conservation is the main reason for the new legions of unlikely island owners. In Canada the Nova Scotia Nature Trust plans to buy or protect over 200 islands. Funded by donations, the non-profit wants to preserve unique ecological systems, says Bonnie Sutherland, head of the trust. In Maine non-profits own 65 islands, which nurture seabirds and seals. The unspoiled sands of the Discovery Islands, 150 miles west of Abu Dhabi, were slated for development until the government intervened in 2012. Now its main residents are nesting turtles and baby osprey. And for less ecologically minded island-owners, it’s reassuring to know there are recession-proof buyers out there.