The transactions in the real estate market of Fiji have been decreased by 80% in the starting months of the year 2007.
The transactions in the real estate market of Fiji have been decreased by 80% in the starting months of the year 2007 as compared to same time of the year 2006, says Shailesh Khatri, senior sales consultant for Harcourts Fiji in news published on Fiji Live.
Mr. Shailesh Khatri said, "January 2007 was fruitful and exciting with expectations of improvements after the standstill in December. This, however, has not continued with February showing signs of major decline in sales and increased pressure on property owners to meet their financial commitments".
Khatri also said that with interest rates close to doubling in the last eight months, "there would be a lot of people that would all of a sudden be faced with doubled repayments monthly, thus facing difficulties meeting the payments".
The housing sales decreased in the month of January after the 'Reserve Bank of Fiji' has changed its rules for the foreign investors on the level of borrowing capacity. As per the new regulation, the foreign investors need to deposit 50% instead of 20-25% towards property financing.
For making current circumstances worse for Fiji, there are not many foreign investors left in domestic real estate market that had fuelled the boom in real estate industry in the past.
In current years, the prices of houses in Fiji rose much more quickly than the incomes of families. Big devaluations of Fijian dollar had the impact of slumping real estate income and rising import costs. Construction of homes in the villages is usually self-financed but the use of contemporary building materials has significantly increased their price. The problem of increasing costs is mainly acute for the urban families in the rental housing.
The increasing rentals with diminishing govt. and local subsidized houses have led to rise in several community members accommodating themselves in the hostels.
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