A Three-Bedroom Villa in a Lagoon in Maldives
$7 MILLION (106.4 MILLION MALDIVIAN RUFIYAA)
This three-bedroom villa stands over a turquoise lagoon off the island of Medhufaru in Maldives, the archipelagic state comprising almost 1,200 islands in the north-central Indian Ocean.

The 6,727-square-foot, two-story villa, with a two-story water slide down to the ocean, was built in 2016 as part of the Soneva Jani resort using reclaimed telegraph poles, eco-friendly bamboo and plantation-grown wood, said Robert Green, the founder and managing director of Sphere Estates, which has the listing.

The architecture is “contemporary but in keeping with the local and Maldivian environment by using sustainable materials,” Mr. Green said. “A great deal is handcrafted on island, creating bespoke ‘Robinson Crusoe’ properties with five-star finishes.”

The resort reuses and recycles materials where it can, and furniture is included in the home’s asking price, said Eva Malmstrom Shivdasani, a co-founder of Soneva. “Driftwood was crafted into furniture and lampshades,” she said. “The floors are mostly made from tiles that look like wood, as well as Bole floors, which are wooden planks that retain the original curve of the tree. The roofs are made from river red gum shingles.”

To the left of the living area is a study and a small kitchen, which is “more like a walk-in pantry with minibar,” Mr. Green said. “The owner and guests typically dine in the resort or have a chef come to the villa.”

Beyond the kitchen is a primary bedroom with an adjoining child’s sleeping area, en suite bathroom and dressing room. The bedroom has a retractable roof and tall French doors with views overlooking the lagoon. The bathroom has a daybed and a window built into the floor, and opens to a private deck with a sunken bathtub and outdoor shower.

Another first-floor bedroom has a dressing room, en suite bath and outdoor sunken bathtub. Stairs ascend to the second floor, which houses a TV lounge, a gym and a third bedroom with a dressing room, en suite bath and access to a balcony with an oak bathtub.

The large west-facing pool deck is mostly sustainably-sourced, sandblasted pine, Mr. Green said. Catamaran nets serve as hammock beds over the pool and lagoon, and the water slide curves around a large sunken seating area connected to the deck.

Maldives comprises a garland of coral atolls built up from the peaks of a sunken volcanic mountain range; a surrounding shelf creates the shallow lagoons between the islands. Rising sea levels are a looming threat, Mr. Green said, though to date, little or no variation has been detected in those levels. “You can expect some tidal surges instead, which can cause temporary flooding but without the devastation. The developer provides warranties and insurance.”

Medhufaru, a 150-acre island encircled by a coral reef, is one of Maldives’ largest and is leased by the hospitality company Soneva, which in turn leases parcels to individual buyers. When complete, Soneva Jani, the resort, will have more than 100 villas, though the majority are hotel villas, Mr. Green said.

The home has access to all resort offerings, including butler and concierge services, a children’s club, a cinema, a dive school and a villa rental program. Residents and guests can congregate at a three-story overwater complex called The Gathering, which has shops, restaurants and bars, a spa, library, gym and yoga pavilion.

Soneva Jani is 35 minutes by seaplane from Malé International Airport, and one hour by speedboat from Soneva’s other resort in Maldives, Soneva Fushi.

Market Overview
Maldives is a Muslim-majority country of roughly 500,000 residents that only began welcoming tourists in the 1970s to its low-lying islands with alabaster beaches surrounded by crystalline cyan lagoons. Tourism has not surpassed fishing as its biggest industry.

There is little data available about historical home sales or overall market conditions, as houses are often handed down from generation to generation among locals, while ownership of land, a precious resource, is restricted by law to Maldivians, brokers said.

“The housing market in Maldives has far more local demand than offerings,” said Paul H.T.M. van de Camp, the chief executive of Dutch Docklands, a developer of floating cities, one of which is being built in Maldives. “There are hardly any agents, and because of the huge shortage, selling will almost only be done within families, friends, et cetera.”

Foreigners cannot legally purchase land in Maldives, though they can rent in places like the Maldivian capital, Malé, or Hulhumalé, a reclaimed island next to the international airport. When it comes to purchasing a home, the options for foreigners are currently limited to multimillion-dollar vacation villa packages on resort islands like Medhufaru.

In those situations, resort operators buy long-term leases from the government to develop islands designated for tourism, then sell subleases to buyers of vacation villas. Resort operators typically rent out the villas when they’re not in use, sharing the proceeds with the owners.

Soneva Fushi, a collection of 64 villas with a handful still available for purchase, was among the first resorts to offer the vacation villa packages in 2011 after a change in Maldivian law enabled resorts to sell subleases to individuals. Soneva Jani began sales in 2016.

Properties sell with subleases of up to 50 years; prospective buyers should check to see how many years remain, Mr. Green said. Resort operators can extend their primary lease by a further 49 years, and often do so for a multimillion-dollar fee, splitting the cost among owners who want to extend their subleases.

Properties are currently priced around $4 million to as high as $25 million; to date there have been four resales of Soneva villas, Mr. Green said. Soneva villa owners aren’t required to place their villa in the rental pool, but if they do, they can achieve net annual returns of 2 to 7 percent of the purchase price, he said.

A villa vacation package should be a safe investment for buyers, said Stephen Petasky, chief executive and founder of The Luxus Group, which manages and develops real estate and lifestyle assets worldwide. “The risk would be: What if the resort doesn’t operate to the level of luxury that they originally committed to?” he said. “But a successfully-operated resort, where they’re generating significant revenue for you, and it’s paying the bills, and you get to use it for free — that’s a pretty good situation.”

Diego Ardizzon, who runs the Cicchetteria da Nino Fisolo, one of the oldest bacari, said it took years of hard work to make the canal livelier and finally it’s paying off.

Bed-and-breakfasts are springing up in the old center. And, for the moment at least, they seem to have a positive effect. “Many of the old buildings were empty, because young people prefer to live in new houses with elevators and other amenities,” said Mr. Perini.

Mr. Petasky, who recently toured Maldives with an eye to entering the market, said the country’s tourism industry, though hampered by the pandemic, recovered quickly, and resort development continues apace.

“The pandemic didn’t so much affect real estate offerings. It just caused a slowdown as a result of no tourists for a year,” he said. “Now, it seems like everyone is spending money on reinvesting or refurbishing their hotels, and there are new ones in the process.”

One such project with the potential to change the housing market is Maldives Floating City, a joint venture between Dutch Docklands and the Maldives government. The city, being developed in a lagoon about 15 minutes by boat from Malé, will comprise some 5,000 housing units tethered to the seabed, available for purchase by either Maldivians or foreign home buyers.

Who Buys in Maldives
Foreign buyers in Maldives typically are high-net worth individuals with the wherewithal to purchase a multimillion-dollar home without a mortgage. “Some are retired, but many are still active in their professions and have teenage to grown-up children,” Mr. Green said.

Soneva’s buyers come from around the globe, including the United States, Canada, Russia and various countries in Europe, Southeast Asia and the Middle East.