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Bargain tropical islands off Oz coast failing to sell

Glossy brochures show pictures of paradise islands but few property investors are seriously looking to buy them as they are costly to maintain and a downturn in tourist numbers could seriously affect income for their owners.

It is estimated there are as many as 30 islands up for sale around the country, and of the 30 Queensland island resorts, a third are on offer in a buyer's market.

Six of them belong to the listed property trust GPT Group, which put them up for sale in the middle of last year, but none has sold.

Industry sources say that they are still over priced and there are too many deterrent factors at present including the difficulties finding staff to look after them. Most of the islands are selling at 50% less than they might have sold two year ago.

GPT's Dunk Island is expected to fetch no more than $25 million having once been valued at $51.8 million. Wilson and Heron islands are expected to sell as a pair for as low as $15 million despite being valued at $35.6 million in December 2007.

Once regarded as luxury resorts where room rates topped $2000 a night they are now regarded as too expensive and even operators that are offering 30% discounts are struggling to fill places.

Much of the property on Quoin Island is in a rundown state and liquidators have been trying to sell it for $1 million for more than a year despite it once being valued at £3.5 million.

The only recent sale has been Little Green Island, which was picked up by a New South Wales based wine family for $3 million. Hinchinbrook Island is being offered for $6.5 million and Turtle Island which initially had a $6.5 million price tag is now seeking any reasonable offer.

Richard Vanhoff, director of Coldwall Banker on the Capricorn Coast said that some islands, complete with airstrips, revolving terraces and home theatres, sell within months, but others take years.

He said that Long Island, bought for $6 million, could now be bought for $2.3 million. 'It's the cheapest I have,' he said.