Will Mauritius Survive this Financial Tsunami?

The Mauritius property boom started when the country opened its borders to investors three years ago with the launch of the Integrated Resort Scheme (IRS).

Before this, Mauritius property owners were 'Buy and Hold' investors, with few sales, almost no estate agents, and very little happening in the absence of buyers or sellers, or money.

Now we have an estate agent on every corner, with web sites and sign boards and marketing agents and banks with specialist property services, notaries so overworked they provide no services, and international developers searching for opportunities.

The IRS developments were well timed. International property markets were booming and there was great investment interest from all parts of the world. In the first year and a half, one third of sales went to Europe, one third to South Africa and the last third to the rest of the world, such as Dubai, Russia, or the East.

Then the lights went out in South Africa and the wealthy Rand investor started having doubts about the abilities of the South African leadership to continue to manage the country as a thriving developing economy.

This increased the interest from South Africa in IRS projects. The popping of the Northern Hemisphere property bubble decreased the potential of this buying market. So the ratios have changed, and at the moment the dominant investor is South African. Partly because the Northern Hemispheric buyer has lost some interest, but more so because demand from SA has exploded.

Another contributing factor is that most of those marketing IRS properties have ties to South Africa.

Mauritius has a lot more projects selling now than two years ago: Anahita, Tamarina, Val Riche, River Club, Les Salines, La Balise, Matala are all selling. Tamarina and Anahita have finished homes available for resale. River Club has 80 percent of units confirmed sold with deposits paid. Val Riche is building madly. Les Salines has been taken over by the Beachcomber Group and promises a good product. La Balise Marina is all but sold out - with practically no marketing. Matala Equestrian IRS started sales this week with good interest.

There are those who shake their heads saying that there is too much on offer with no buyers. What these people need to realise is that Mauritius is TINY and the rest of the world is HUGE. The property market on our perfect bit of paradise is so small it qualifies as some of the most exclusive property in the world.

So will it be affected by global collapses in property and banking?

Yes, it will be harder to borrow money to buy a unit. Banks aren't in a lending mood these days. This makes it harder to buy and harder to sell.

Yes, there will be fewer people looking to buy property anywhere, but remember, we are special by virtue of our lack of size, so this may not affect us too much.

And then there is a benefit: We are pretty insulated from global events. Our economy is self serving with little effect on anything else in other economies. The world passes us by.

Why is this a benefit? Our markets are insulated. When the worlds property markets drop ours keeps on rising. Maybe not as fast as before, but still up.

When the Asian Tsunami hit the Indian Ocean on 26 December 2004, destruction and loss of life and property was experienced as far away as Kenya and Mozambique.

In Mauritius we got one very high tide and one very low tide. Zero damage. We are protected by one of the largest ring reefs in the world. This barrier takes the force out of the waves.

I firmly believe that our property market is equally insulated and will weather this financial Tsunami better than anywhere else.