Sunday, October 21, 2018

Why I Don’t Appraise in Antarctica

In the by-line of my blog I mention that I have appraised real estate on every continent but Antarctica. I have not written off that possibility, but doubt that there will be a situation which would call for a real estate appraisal.

For one thing, there is no civil authority or indigenous people in Antarctica, and thus no property rights.  Seven nations had staked territorial claims on Antarctica before the United Nations passed the Antarctica Treaty of 1959, which subsequently prevented any further territorial claims in Antarctica, but allows any nation to establish stations for peaceful scientific research.  

The seven nations claiming territorial rights are the United Kingdom (who got there first), Argentina, Chile, Australia, New Zealand, Norway and France.  Nazi Germany did make a half-hearted attempt to stake a claim by using aircraft to drop giant swastikas as borders to its claim but gave up their claim after their military defeat. 

The British, Argentinian and Chilean claims are overlapping, though, and some may remember the 1982 war between the British and the Argentinians over their conflicting claims to the Falkland Islands in the South Atlantic, which were populated by 1820 British subjects and 400,000 sheep. Such a war over Antarctica would seem sillier.  The year-round total human population is only about 1000, and there is no use fighting over penguins.

There are some reasons why there may be no reason for real estate appraisals in Antarctica. First, the research stations are government-owned and would not be subject to property taxes. 
Secondly, there seems to be no serious active market for the trading real estate (except for a few flaky foreign realtors who think they can attract residents).

Thirdly, setting up a plat map system is confounded by the fact that most buildings are built on ice on a constantly moving ice sheet which is hundreds of meters thick. The land underneath is worthless and the buildings would constantly moving over multiple parcels.

Then, there is the vacancy rate. 62 out of 156 research stations are closed, making for a 40% vacancy rate. They are still owned by their respective nations, but 18 of these stations are technically considered abandoned, many by nations such as Japan, Belgium, the Netherlands and the Soviet Union which perhaps reevaluated their need to be down there. These installations are for the taking. That is the equivalent of no market value.

Argentina is the only nation which has established an actual permanent town, Esperanza, as seen above, even flying in pregnant women to have their babies born there to establish some vestige of Antarctic citizenship, in an effort to establish some type of territoriality. Military troops are also stationed there. Territorial claims might mean something if valuable minerals or oil are discovered, and the underwater continental shelf could be holding some surprises.

Although the mid-winter average temperature has increased by 6 degrees centigrade (10.8 degrees Fahrenheit) in the last 50 years, Antarctica remains the harshest environment on Earth.  Most of the 4000 people working there in the summer leave before the winter, when the weather is so harsh that planes cannot travel there for several months. There is an estimated 1000 who stay during the winter, but cabin fever can get dreary, and medical emergencies cannot be promptly handled.

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