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Real estate prices gone wild in Tonga!
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03-19-2008, 01:15 PM
Post: #1
Real estate prices gone wild in Tonga!
19/03/2008 1:50:21 p.m.

It costs more to buy a piece of real estate in Nuku’alofa than it is to buy a house in some parts of Sydney, Auckland or even Los Angeles.

Property prices in Tonga have skyrocketed to extreme heights for no apparent reason even though it is illegal to sell land. To overcome this problem, properties are advertised with the undertaking that full registration transfer will be given.

Real Estate companies are emerging and advertising property packages for as much as US$500,000 for a 3 bedroom house in a town allotment. This is equivalent to NZ$650,000 and it could buy you a small farm in New Zealand or a 5 bedroom house and land package in the outskirts of Sydney Australia. It could also buy you a nice property in one of the suburbs in Los Angeles.

What is driving the property market in Tonga? The simple answer is unrealistic expectations. Some property owners think that buyers are desparately lining up to buy property in Tonga.

An analysis of the real estate businesses found that many of the houses on sale, including change of registration, can take up to 12 months or longer. Despite the long wait, some owners, are reluctant to reduce prices to attract buyers but are hanging on in the hope that there are buyers out there desparately looking to buy a piece of paradise in Tonga.

Buyers intending to purchase property in Tonga will not pay more than what is realistic and they always use the value of house prices in their place of residence compared to that in Tonga.

The property prices in Tonga right now is similar to a situation where the property market is “heating up” and this is when the actual price of the property is well above its market value due to the higher demand.
The problem is, the demand for property in Tonga is not that high and the property market is very small. Most of the houses available are for rental accommodation rather than outright ownership. Property buyers understand that spending $US500,000 on a property in Tonga must be weighed up against what they can buy in the US, New Zealand or Australia for example.

This is an investment and there is no guarantee that their investment will grow by purchasing a property in Tonga. They are more likely to earn a better return if they purchase a property overseas.

The land transfer process is also major issue because if it is under a Noble Estate then the situation can get complicated for someone wanting to transfer a title to a new owner. If the Noble rejects this then the deal is off.
For potential buyers, the best way to get the true value of a property is to use one of the registered valuers. This information is available from the Ministry of Lands and Survey in Nuku’alofa.

The global property market is subsiding and in some countries such as New Zealand and the US, prices have dropped by as much as 19% just over the last three months. Bargains will emerge so it is cheaper to buy property elswhere compared to Tonga.

Tonga's property market is seriously overvalued by as much as 30% in some cases. Some of the resorts are up for sale at US$1.5 million. If you put $1.5 million in the bank, you can make US$150,000 in interest without even moving a finger. Now, can you make the same amount in profits by purchasing one of the US$1.5 million resorts? Highly unlikely given the state of the economy and the exchange rate differences.

What about purchasing a US$500,000 property and renting it out for $2,000 a month? It will take you over 50 years to try and recoup your investment so this is no a good investment. These simple examples give us an idea of how overvalued property prices are in the Kingdom.

The use of registered valuers and financial advisors to undertake proper valuations will help to find the equilibrium price to match the demand and supply forces in the property market. This should help to bring prices back down to earth and in line with the economic situation in Tonga.

Currently the following real estate agencies which cater for Tongan properties are as follows:


Marketonga Real Estate
http://www.marketonga.to

Investment in Tonga Real Estate
http://www.investintonga.com

Hasdra Real Estate
http://www.matangitonga.to/home/ads/hasd...index.html

Niu Island Real Estate
http://www.matangitonga.to/home/ads/niui...index.html

South Pacific Real Estate
http://www.southpacificrealestate.com

Source: http://www.tongareview.com/Article.aspx?Mode=1&ID=5431
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03-20-2008, 08:45 PM
Post: #2
RE: Real estate prices gone wild in Tonga!
I doubt that a small one bedroom Falepola and a nearby outhouse would cost $5OO,OOO.
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11-23-2010, 04:34 PM
Post: #3
RE: Real estate prices gone wild in Tonga!
$500,000 for a 3 bedroom house that is expensive anywhere in the world. I can understand the situation that there is huge demand for property and hence prices are just sky rocketing and only when the market demand cools down the prices will become realistic and a true reflection of actual cost of property.

Good Liverpool Builders
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11-23-2010, 05:28 PM
Post: #4
RE: Real estate prices gone wild in Tonga!
It goes without saying that : "A Fool parts easily with his or her money". It has been stated that the 'out-and-out' sale of land is illegal in Tonga. One can of course apply for a land allotment but beware of the risks. A long-term lease maybe safer. Be wary of 'LAND-AGENTS'. A licencesed law practitioner will be your safest bet.
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11-29-2010, 04:25 AM
Post: #5
RE: Real estate prices gone wild in Tonga!
An invesetigation was recently done about this in Tonga, particulary Vava'u. There is a web site that has been set up that reports on the findings of the investigation (Commission)

There are a number of palangi real estate agents (including a palangi Female married to a Tongan) in Nuku'alofa that are trying to sell and rent properties to unsuspecting palangi's. BEWARE!

I think the government (when its finally formed) should legislate against these practices since you cannot sell land in Tonga. And many people are being burnt by this.
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01-03-2011, 07:00 PM (This post was last modified: 01-06-2011 05:52 PM by Sundari67.)
Post: #6
RE: Real estate prices gone wild in Tonga!
Does it mean we need to consult first a real estate agency when we plan to buy a property in Tonga? The real estate agencies are mentioned above so it is legal to transact with them. I have found a prospective property in Tonga and I would really appreciate your thoughts.

My Real Estate Sports
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01-03-2011, 07:03 PM
Post: #7
RE: Real estate prices gone wild in Tonga!
(01-03-2011 07:00 PM)Sundari67 Wrote:  It means that when buying a property in Tonga, we need to consult first to real estate agency? The real estate agencies are stated on above so it is legal to transact with them. I have actually a prospective property to buy in Tonga and I would really appreciate your thoughts.

MISIPEKA,,,,,, 'OHUA ATU 'O FAI HO'O TU'UAKI FALE KO'ENA HA LOTO'A KEHE,FAI2 PEAU PUKEMAI KOE 'O LETA'I KOE KEKE HEKETAKAI HOLO HENI........
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01-04-2011, 12:34 PM
Post: #8
RE: Real estate prices gone wild in Tonga!
(01-04-2011 02:29 AM)muitafuna Wrote:  
(03-19-2008 01:15 PM)Admin Wrote:  19/03/2008 1:50:21 p.m.

It costs more to buy a piece of real estate in Nuku’alofa than it is to buy a house in some parts of Sydney, Auckland or even Los Angeles.

Property prices in Tonga have skyrocketed to extreme heights for no apparent reason even though it is illegal to sell land. To overcome this problem, properties are advertised with the undertaking that full registration transfer will be given.

Real Estate companies are emerging and advertising property packages for as much as US$500,000 for a 3 bedroom house in a town allotment. This is equivalent to NZ$650,000 and it could buy you a small farm in New Zealand or a 5 bedroom house and land package in the outskirts of Sydney Australia. It could also buy you a nice property in one of the suburbs in Los Angeles.

What is driving the property market in Tonga? The simple answer is unrealistic expectations. Some property owners think that buyers are desparately lining up to buy property in Tonga.

An analysis of the real estate businesses found that many of the houses on sale, including change of registration, can take up to 12 months or longer. Despite the long wait, some owners, are reluctant to reduce prices to attract buyers but are hanging on in the hope that there are buyers out there desparately looking to buy a piece of paradise in Tonga.

Buyers intending to purchase property in Tonga will not pay more than what is realistic and they always use the value of house prices in their place of residence compared to that in Tonga.

The property prices in Tonga right now is similar to a situation where the property market is “heating up” and this is when the actual price of the property is well above its market value due to the higher demand.
The problem is, the demand for property in Tonga is not that high and the property market is very small. Most of the houses available are for rental accommodation rather than outright ownership. Property buyers understand that spending $US500,000 on a property in Tonga must be weighed up against what they can buy in the US, New Zealand or Australia for example.

This is an investment and there is no guarantee that their investment will grow by purchasing a property in Tonga. They are more likely to earn a better return if they purchase a property overseas.

The land transfer process is also major issue because if it is under a Noble Estate then the situation can get complicated for someone wanting to transfer a title to a new owner. If the Noble rejects this then the deal is off.
For potential buyers, the best way to get the true value of a property is to use one of the registered valuers. This information is available from the Ministry of Lands and Survey in Nuku’alofa.

The global property market is subsiding and in some countries such as New Zealand and the US, prices have dropped by as much as 19% just over the last three months. Bargains will emerge so it is cheaper to buy property elswhere compared to Tonga.

Tonga's property market is seriously overvalued by as much as 30% in some cases. Some of the resorts are up for sale at US$1.5 million. If you put $1.5 million in the bank, you can make US$150,000 in interest without even moving a finger. Now, can you make the same amount in profits by purchasing one of the US$1.5 million resorts? Highly unlikely given the state of the economy and the exchange rate differences.

What about purchasing a US$500,000 property and renting it out for $2,000 a month? It will take you over 50 years to try and recoup your investment so this is no a good investment. These simple examples give us an idea of how overvalued property prices are in the Kingdom.

The use of registered valuers and financial advisors to undertake proper valuations will help to find the equilibrium price to match the demand and supply forces in the property market. This should help to bring prices back down to earth and in line with the economic situation in Tonga.

Currently the following real estate agencies which cater for Tongan properties are as follows:


Marketonga Real Estate
http://www.marketonga.to

Investment in Tonga Real Estate
http://www.investintonga.com

Hasdra Real Estate
http://www.matangitonga.to/home/ads/hasd...index.html

Niu Island Real Estate
http://www.matangitonga.to/home/ads/niui...index.html

South Pacific Real Estate
http://www.southpacificrealestate.com

Source: http://www.tongareview.com/Article.aspx?Mode=1&ID=5431

koe ha kuo mou manumanu pehe ai moe fanga mata'uz totonu kemou omai ke fa'o kimoutolu ko'ena kau tu'uki mamafa pehe 'i tonga ha falemalolo ponu pea tapuni'i kotoa kimoutolu 'i loto.

KAI IA 'AE LILLIU TEMOKALATI ..FAI MO FAKA'ATAA KE FAKATAU E KELEKELE ..KAE TUKU KE FAKATAU HE KAU SIANA TONGA KOTOA KA MOU OO FOKOTUTU'U SIKESIKE MAI MEI MALINOA HANGE HA KALAE LOL LMAOOO
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