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ANALYSIS: Problems Of Growth In The West

ANALYSIS: Problems Of Growth In The West
First Landing Beach Resort in Vuda.
September 26
11:26 2015

John Ross is a Nadi-based marketing and advertising specialist with a long background in tourism.

 

Right now there is a big investment explosion in the Western Division, with a significant number of large investments starting or about to start and an even larger number of small to medium projects getting underway.

This is great news for the Fijian economy and something that the current Government is encouraging.

This is by making the investment a focus for the ministries, creating a much more user friendly environment than existed in the past.

An environment where bureaucratic blocks were often the hurdle that caused an investor to look elsewhere and there was no reliable legislation to guide the investor in the requirements.

All that has changed, or in some cases, changes are being implemented. The success of this approach is the current high levels of activity in both local and overseas investment.

But with such activity come issues that need to be addressed if the growth promised id to become reality.

 

Demand for labour is rising fast

The growth of investment is far outdistancing the increase in available local labour supply and there is a growing shortfall in supply.

This situation is evident in all sectors of the labour market, mostly focused on the tourism and construction industries.

The tourism sector is enjoying sustained growth and needs to maintain a steady increase in the number of people available.

This is to operate the hotels, resorts, facilities and services such as water transfers, road transport, arrival and departures, and the host of other areas that support and service the industry.

Many of these areas require trained personnel, and the numbers can only be increased slowly in the local market.

So strong is the demand that one contractor with projects in the Mamanucas recruited the people he required by simply offering them double what they were earning.

He is not the only one, and there are looming issues with the projects being able to be completed on budget.

Companies have spread their recruiting outside the Western labour pools, with a good degree of success, and many people are pulling up roots and moving to the greener pastures in the west.

They know that work is plen tiful and that the demand will be sustained long-term, so they are comfortable in making the sort of lifestyle change that would have been out of the question even a year ago.

But this high level of prosperity and the lure of a better life have created another problem.

 

The lack of available housing

There has, for a significant length of time, been a very tight housing rental market in the West.

This has been most noticeable in the mid to lower end of the rental market, previously considered to be in the $450 a month and below bracket.

In the last year to two years that bracket has crept up to $600 and there is strong evidence that it will continue to go higher under the growing levels of demand created by the number of new people entering the market.

While there has been rental increases all across Fiji, they are not as pronounced as they are in the Western Division.

An examination of the rental data shows increases, but does not show the dramatic increases that are happening in the market because at the lower end of the market many of the rental agreements are not documented or filed for stamp duty.

In fact, many of them do not go through regular channels such as Estate Agents and a simply not recorded.

The landlord usually demands (and is paid) a bond, typically one month’s rent, and often the arrangements for FEA supply and water are not official, making a realistic measurement of the market even harder.

When the rental arrangement is terminated the tenant invariably has problems claiming the bond back, adding to the real cost of renting.

Because of the huge demand, many casual rental properties are being put on the market.

A number of these involve converting existing properties to house multiple families, adapting part of an existing property to provide some form of semi self-contained accommodation, often with shared toilet facilities.

Building an unauthorised structure either additional to or an extension of an existing approved building and providing illegal sewer, water and electrical connections.

And invariably, when questioned, the owner will claim that they are trying to assist people who would otherwise not be able to find housing.

Unfortunately, there is some real basis for such a claim.

 

Many substandard rentals

The ease of renting a property now has allowed a concerning trend to become apparent, substandard buildings that are rented by people seeking accommodation at this end of the market because there are many more people in the market than there are offerings.

These people do not rent the property because they like it; they rent it because it is all they can afford.

It should be quickly pointed out that there are many properties in this bracket that are acceptable, safe and healthy, in fact these are probably in the majority.

But there is a significant minority that is not fit to live in when measured against the standards that people have a right to expect.

Often the bathroom is rudimentary, the facilities limited and not completely hygienic and the ventilation limited.

The other rooms are often too small for a healthy lifestyle in the climate that exists in the west, with poor cross ventilation and limited (or non-existent) insulation.

Flooring is often bare and difficult to keep clean.

Some people in the tourism industry who have been seeking off-site accommodation for their staff have been appalled by the condition of properties offered on the market.

This is particularly the secondary market usually either advertised in the newspaper, by small signs in shop windows of simply by word of mouth.

They question how such a market can exist in modern Fiji.

 

No effective overview

In short, there is no effective overview of the rental market in the lower brackets, perhaps because most of the properties are not readily visible and are not known to the authorities.

It would seem that some of the regulatory bodies such as the local council, the health authorities, Consumer Affairs, the NGOs who claim to be concerned about the protection of the under privileged and the many other bodies that come into contact with this segment of the market are not interested.

In some cases it seems they even turn a blind eye.

Unless something is effectively done soon, the West runs the risk of developing ghettos of under-privileged working class groups.

If the problem gets large enough it will be very difficult to control. And the people who are renting in this group are actively trying to improve their lives and the lives of their children.

They deserve the help of the authorities to achieve that improvement, and a decent standard of accommodation is the foundation on which they will build their future.

Feedback: john@vititones.com

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