12 African countries rank in the top 20 most affordable states for luxury real estate.
For the world’s wealthy elite, purchasing homes and land in exotic locations is becoming en vogue. Owning property in former disaster and war zones is now a sign of wealth and adventurous superiority for those in the luxury real estate market.
When one thinks of Africa, luxury real estate may not be the first phrase that comes to mind. A study by German real estate company Lamudi, released on September 1, 2015, contradicts that thought. Twelve African countries, ranging from those recently embroiled in devastating violence to historically stable ones ruled by law, are ranked among the top-20 most affordable luxury markets. Lamudi specializes in emerging markets, being present in 32 around the world, including Northern and Sub-Saharan Africa, Mexico, and South America.
The Price of Cheap Land
These relatively impoverished countries boast inexpensive real estate prices when compared to the global market, although most is not within the realm of reality for the average citizen.
In Ethiopia, where the average income is 496 euro per year, the average cost per square meter is 396.98 euros. For 30% of the population making $0.60 USD or less per day, these properties are not even a pipe dream. The low average cost may be due to a conflict of ethics concerning excessive consumption in a country known for mass starvation during regular famines and droughts.
Côte D’Ivoire, a country that has been plagued by multiple civil wars since gaining independence from the French in 1960, has a gross national income (GNI) of 1,314 euros per person. Luxury real estate averages 427.65 euros/m2 based on Lamudi’s assessment of listings on their site. While out of reach for the average Ivorian, this bargain may be too good to pass up for the wealthy in the largest economy of the West African Economic and Monetary Union (WAEMU).
Tanzania, where the local currency has experienced a nominal depreciation of 20% in the last ten months, came in third place on Lamudi’s list with an average price of 486.03 euros/m2. Roughly 28% of Tanzanians live below the poverty line, and the country has an average yearly income of 840 euros per person.
Kenya, one of Africa’s biggest tourism draws, ranks sixth on Lamudi’s list after Mexico and Colombia. With an average price of 850.96 euros/m2, Kenya’s real estate market is a draw for those looking for properties in the heart of Africa’s stunning landscape. For those living on an average income of 1,225 euros per year, such grandeur is the stuff of dreams.
West Africa’s largest oil exporter, Nigeria, is right behind Kenya with an average price of 856.29 euros/m. Nigeria’s average personal income is 2,885 euros, due in large part to its oil-based economy. Whether investors opt to purchase property in this country, best known for Boko Haram and the insidiously corrupt oil industry, remains unknown.
Tunisia, recognized for its role in the Arab Spring, slides into ninth place with an average price of 885.52 euros/m2, while Ghana – a very stable West African country recently blessed by an investment via tech titan Google – with an average price of 1,035.75 euros/m2, is tenth.
Morocco’s average price of 1,144.25/m2 ranks eleventh, ahead of Mauritius at 1,484.49 euros/m2 in twelfth. In Morocco, the GDP per capita is 2,795 euros, while Mauritius’ is considerably higher at 9,010 GDP per capita. Mauritius is one of Africa’s tourism hotspots, famed for its beautiful beaches and multicultural makeup. Its land mass is only 2,040/m2, which makes the relatively low cost of real estate all the more surprising.
Three countries, recognized by their violent past, round out the top-20. Uganda is ground zero for the Lord’s Resistance Army (famous for its use of child soldiers) and is ranked 15th with a price of 1,597.22 euros/m2. Algeria is the site of another Arab Spring uprising that included some self-immolations; it comes in 16th with a price 1766.53 euros/m2. Angola, one of the continent’s most heavily land-mined countries, has a whopping price of 3,965.52 euros/m2 rounding out the top 20 on Lamudi’s listings. De-mining is, after all, expensive.
A Luxury Market for Whom?
The above twelve countries are no strangers to social difficulty, yet all have proved themselves resilient in the face of adversity. Their luxury real estate markets indicate a level of interest by the world’s elite in investment, and where opulent homes exist; there is demand for extravagant goods. Will the expansion of Africa’s niche real estate market have a trickle-down effect, or will it benefit the lucky few?
Given the moral gray area of living an openly luxurious life in countries where potable water is not a guarantee, one important question springs to mind: who is purchasing these extravagant properties? Lamudi’s managing director of Ethiopia, Wunmi Osholake, cited a development by a Chinese company as one example. “In recent months, we have seen a number of luxury developments announced, including the 21-tower project from Chinese developer Sinomark Real Estate, which will be the country’s biggest real estate project to date.” As the continent’s largest trade partner, China’s interest in developing decadent homes is understandable. Their choice of using Chinese companies employing primarily Chinese citizens, however, does not indicate that the construction of these projects will do much to improve the economic outlook for locals. As Chinese investment in Africa increases, so does their demand for an appropriately luxurious lifestyle.
Photos sources : Buzzkenya.com