Free Resource - A guide to the African Property Market

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Africa property market

The term Africa means so many different things to different people that it can be difficult to focus on the region as opposed to individual countries. For as long as we can remember Africa has been put forward as the future growth market of the world but so often it has failed to deliver amid political uncertainty, troubled economies and negative headlines across the worldwide media. However, in many ways this image of Africa is misguided and biased and does not allow the more positive aspects of the region to come forward.

Real estate market

There are obviously major towns and cities across Africa attracting overseas investment both in terms of commercial business and property. At this moment in time it is probably more helpful to look at the reasons why so many experts are very positive on Africa in the longer term. The fact is that as the African economy as a whole continues to grow this will attract more international investors and the property market will prosper.

Worldwide population

While looking at countries such as the UK many experts often highlight the issue of immigration as the UK population continues to grow. While the limited immigration in the UK is most certainly having an impact upon property prices when you bear in mind that by 2100 a phenomenal 40% of the world’s population will live in Africa, what impact will this have on demand for property?

It would be wrong to suggest that all of Africa’s woes of years gone by have been solved. It would be wrong to suggest that poverty and inequality are not major issues but the fact is that progress has been made and this will continue. Western countries are investing heavily in aid for Africa which will eventually translate into increased business investment, more international awareness and further economic growth stimulus.

The African economy

There is some argument about Africa’s largest economy but under new GDP guidelines the largest economy in 2014 was Nigeria. Even if we put this argument to one side did you know that over the next five years more than half of the 20 fastest-growing economies in the world will be situated in Africa?

While it will take some time to tackle the issue of poverty the long-term growth trend in the African economy will certainly help. We are already seeing a significant increase in the urban middle classes who now have more money to spend which is encouraging more businesses to relocate and injecting new life into the retail property market. As these businesses continue to grow their employees will also require homes in and around the employment hotspots thereby adding further liquidity and demand to property markets.

The future

Investors would be excused for suggesting this is the “same old story” for Africa which has for many years now been put forward as a future economic powerhouse. If we strip away the negative headlines, the political infighting and cultural differences across some regions you will then see the real Africa. International businesses have been targeting Africa for some time now and as the economy continues to grow so will their investment. If we look back to the days of apartheid and trade restrictions with South Africa this area of the world is almost unrecognisable today.

There are risks investing in Africa but for many investors the potential benefits are far greater especially for those with a long term investment horizon.