Africa, the world’s second largest and second most populous continent after Asia in both cases is a continent conceded in great lengths to have a vast of natural resources; from wild life to adoring topographical features, beaches, oceans, rivers, mountains and plains. Today, the continent is also ranked with preeminence in real estate development.
Africa has turned into a hub of opportunities for real estate developers and investors who see this as a bonanza for gathering many returns. The real estate market of Africa in itself is moving at a significantly faster pace than thought of and has become an important and strategic economic sector with regards to the reasons stated below;
Countries like Mauritius, Ghana, Botswana, Sierra Leone, Zambia, Malawi, Tanzania, and Namibia widely acknowledge for their peaceful atmosphere due to political stability they have been enjoying from independence till date. Political instability especially that of a violent nature cripple investors’ perception of acquiring property rights attributing that to the fear of loss of the investment value. However, for most African countries, the fortune of real estate industry seems to be turning for the better because it offers a relatively stable and predictable political environment which improves investor confidence thereby making it a top real estate destination.
Africa’s population is approximately 1,377,004,728 with a literacy rate of about 70.06 percent. This means a huge number of the population are educated persons and professionals who on day to day basis flow into the cities craving for higher standards of living. With this huge number of population inflows in the cities, housing becomes the most basic demand. Therefore, the large-scale population migration promotes the development of real-estate markets in the population inflow areas.
While Africa is considered to be among the least developed continents in the world, it is rated as having the fastest growing economy. Demand for housing is dependent upon income, with a fast-growing economy and rising incomes among the people, Africans are able to spend more money on houses thereby increasing the demand for housing.
Africa’s construction sector is growing, led by the boost of affordable housing and crucial infrastructure development such as roads, railways, ports, hospitals and schools. With government improving the local transport systems and infrastructure across the continent, it is inevitably causing an increasing demand for housing in the surrounding areas due to accessibility and easy locomotion among individuals and thus making the real estate market grow.
The ratio of house prices to earnings influences the demand, thus when houses are affordable more people trop in to make purchases. In most African countries, government is trying as much as possible in its affordable housing projects in partnership with both local real estate developers and investors to make more houses affordable to the growing population. The housing project, however is to help eradicate the current housing deficits on the continent.
There is an increasing demand for residential, as well as commercial property in Africa amidst the supply in the real estate market due to high population growth. It is undoubted that Africa is growing in the real estate market due to high demand of residential properties.
The adage “location, location, location” is still a king and continues to be the most important factor in the real estate business. Africa has a tropical climate with a wonderland of tropical flora and fauna. Its natural beauty has made it a popular tropical destination for real estate developers encompassing plains, low hills, rivers, and island characterized by a general low physical relief. Proximity to amenities, green space, scenic views and beautiful landmarks, real estate within Africa adds to the scape of the land and neighborhood’s status which is factor to property valuation.
Availability of Lands
There is no real estate without lands. Lands form a major contributing factor to real development and the construction industry as a whole. Therefore, no lands mean no real estate thereby the construction industry coming to a stand-still. Africa spans a total land mass of 30.37million km² with availability of vast lands. The availability of lands makes the continent rise higher in real estate development in other words breaking the boundaries of the real estate market.
In Africa high levels of consumer confidence encourages a higher marginal propensity to purchase more. With real estate providing an easy and on-the -go access to properties and assets, confidence most certainly than ever has increased considering the rate at which houses are being purchased. People trust that the most effective way to secure their funds is taking up properties and assets. Confidence playing a key role is very important for determining whether people want to take risk of taking up secured assets. Therefore, with consumers confident about buying properties, countries in Africa continue to grow in the real estate market.
The ratio of external investors gives direction to the real estate industry for sure. Africa being an investor-friendly continent builds relationship and welcomes foreign investors who pull their resources and ideas together to make good use of the growing real estate industry. This has adversely supported the country into becoming a top real estate destination.
There are numerous ways Africa is making headways in the real estate industry. And it’s very interesting how an underrated continent is doing so much in a sector this huge. To sum up everything that has been stated so far, Africa has become a real estate haven because of political stability, rural-urban migration and the desire for higher living standards, its growing economy, infrastructure development, affordable housing, high demand of housing due to increased population, its tropical locations, available lands as raw material for real estate, consumer confident about trusting the African real estate source, and the increased foreign investment. Bear in mind the factors listed above as contributing elements to the progress Africa is making in the real estate industry.