Africa is fast becoming the place to be for many private investors looking for opportunities in real estate, thanks to its booming economy and swiftly increasing population. How good an opportunity does Africa present in comparison to other growing economies?
Global real estate
Global financial instability has led investors to think outside the box and look at previously unexamined regions to develop their real estate portfolios. Africa is one such region, as are countries in the Middle East, such as Qatar. Many factors affect the attractiveness of countries to all types of investors. Major events, such as the 2022 FIFA World Cup, have the ability to affect the prices of property as building projects to support the event spring up in and around the venue area. Tourism also has an impact upon the property market. Mexico, for instance, is a popular holiday destination, and the country is intensively building holiday accommodation in Acapulco and other tourist hotspots to keep up with demand.
Kuwait is another region that is enjoying a boom in real estate. In 2014, Kuwait noted a record high 18% surge in the sale of properties in the region. The industry even suffered for a few months because there was a lack of properties available for sale in some of the most sought-after areas of Kuwait. There are long waiting lists for residential properties, so there are obvious opportunities for real estate investors, such as Fahad Al Rajaan (for more information, see Fahad Al Rajaan on Facebook). So attractive is the real estate market in Kuwait, that multimillion-dollar construction projects have already been announced, including private sector, commercial and residential complexes that include shopping malls, hotels and waterfront marinas. Other residential building projects under development will be long-term endeavours, such as the Silk City project, which is expected to last for the next 25 years.
However, a booming economy alone also has this effect. Africa’s infrastructure is undergoing a rapid development, which is impacting significantly upon the property market, most noticeably in Kenya, while infrastructure improvements both in and around Nairobi have been a key driver in a property boom experienced on the country’s outskirts.
An increasing population also brings a huge demand for housing. It is estimated that by 2100, almost 40% of the world’s population will call Africa home, with the majority living in the rapidly-developing cities. Regions of particular interest to developers include Botswana, Lagos, Johannesburg and Nigeria. Sub-Saharan Africa offers some of the best opportunities for real estate as it has become one of the most rapidly developing economic regions in the world. Rapid urbanisation has led to a demand for high-class buildings, which at present are not to be found in the region. Plans under development include shopping centres and offices, as well as industrial estates.
Many investors and economic analysts insist that Africa presents significant challenges to the real estate market, yet they also highlight the many profit-making opportunities that the continent offers in comparison to other growing economies.