When thinking of Africa, you automatically imagine lions, elephants, zebras and other wildlife. But truth is, these days, the continent is quickly developing and it is improbable that you will find any wild creatures in the streets. African countries are even some of the fastest growing economies in 2018, with Ethiopia being the top 5 globally.
Aside from economic expansion, African countries also have some of the highest high population growths, leading to a huge demand for housing and retail space. This is behind Africa’s transformation as a global property investment hotspot.
Here are some of the lesser known facts about Africa’s booming real estate industry:
Developers are usually non-African.
Foreign investment is making a tremendous impact on Africa’s real estate industry, most investors being Middle Easterners, Asians, and Russians. Part of the appeal are a flourishing tourist industry and favorable exchange rates. Big hotel groups are always expanding their African portfolios, though other attractions outside tourism are also in the mix.
Housing is often cheap.
Very few Africans are capable of owning upscale homes. This is why foreigners are the more common owners of luxury properties in the continent. If you’re aiming for a long-term investment, affordable housing is probably risky business. You may pocket a bigger profit after selling one luxury villa than many low-cost properties. For one, you need to find a local bank that will grant mortgages to low-income buyers.
Even if a simple urban unit cost as low as $10-20,000, it would be pipe dream for most local folks. Yet all throughout Africa, there remains a tremendous need for such type of dwelling. However, if you want to uplift others’ lives as part of your mission as a developer, then there is great reward in going this direction.
Nigeria is unstoppable.
After suffering the most catastrophic recession in more than two decades, Nigeria is establishing a reputation for its rapidly growing technology and agriculture sectors. Even Facebook and Google are planning to base their African headquarters in Lagos.
South Africa’s real estate industry is up there.
South Africa may be dealing with ongoing corruption issues, but that hasn’t stopped it from being a famous investment hub. The cost of living is low and the rand remains weak against most world currencies. Cheap housing is the norm, and tourism is growing. Global investors keep to investing in the accommodation and recreation industries.
Sometimes, it gets complicated.
With its colorful array of cultures and nationalities, Africa is exactly what you would call a complicated continent, where Property laws are as diverse as the population. A 50% deposit is often required when you buy land. In certain countries, such as Mozambique, only the government can own land. In any case, spend time doing some research so you can learn more before investing in African real estate.