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5 Best Cities For Real Estate Investments In Africa

Real Estate, african real estate

5 Best Cities For Real Estate Investments In Africa.

Real estate investments in Africa is popular among serious investors because of its minimum risks and high returns. The world’s globalization has made it possible to invest in any country of choice. Though some investors are moving to  Asia, Eastern Europe, and Latin America, Africa provides one the greatest real estate investment opportunities to guarantee a high return on investment. Smart investors are interested in the workings behind the scene in Africa and grabbing investment opportunities this continent provides.

China Taking the Lead

The potential of Africa’s real estate investment paradise is seen in the interest of the Chinese government in the area. China has over 70% of foreign direct investment across major African cities. Investors who have followed the world’s profitable investments know that it is prudent to follow China’s lead in these areas. Other nations, such as Turkey, India, and Russia, are also following China in wooing Africa to tap into its growth potential. The United States has also not been left behind in the race to Africa, as it doubled its bilateral trade with several African countries since 2001.

Unfortunately, many investors and businesses are still uninformed of the African opportunity since the continent has a fairly small economy with less tangible information. Nevertheless, in recent decades, many African countries have implemented economic reforms, improving their ability to conduct business with the rest of the world.

Housing Opportunities and Challenges

The influx of people in Africa’s large cities searching for green pastures and higher wages is putting the governments under pressure to provide affordable and quality housing. The demand for housing in most African cities is overwhelming supply as the middle and upper class continues to grow, promoting the need for safe and high-quality housing. One common challenge you may encounter while investing in Africa’s real estate market is lack of transparency and rampant corruption; however, if you can deal with these risks or avoid them, the return on investment is higher than in most developed worlds.

The continent also has vast farmland and a pool of natural resources. With the projected growth in the world’s population, the value of these resources will only continue to rise. Urbanization heightens the demand for affordable housing in the cities, thus providing investors with an unending opportunity to reap big from their real estate investments. Here is a list of African cities that provide you with profitable real estate opportunities you could take advantage of.

Lagos, Nigeria

Lagos Nigeria is Africa’s largest economy, occupying position 6 in the continent’s list of the fastest-growing economy. Several factors make this city a hotbed of real estate investment opportunities, including:

Population-The bustling population in the region is a propelling factor for the development of the industry. The population density of Lagos is approximated to be 5,000 persons/km2, making it one of Africa’s most inhabited cities. This population is constantly looking for accommodation, meaning you are assured of the demand of your house at all times. Additionally, the population of Lagos boosts the powerful high and middle-income earners, providing readily available buyers of housing and land.

High Property Value- Another reason making this city a powerful investment opportunity area is its insane rate of return on real state properties. The city’s State Market Analysis indicates that Lagos provides Nigeria’s biggest estate prices. For example, a piece of land costing 5 million nairas in 2006 costs 65 million nairas in 2021.

Accra, Ghana

Accra has over 4 million people and is projected to continue growing in the coming years. Ghana is also considered a politically state African country, keeping a cordial relationship with its neighbors, thus minimizing political instability. Accra is attracting several foreign direct investments and expatriates, making it a lucrative region for real estate investment. Additionally, the city and the state permit foreign property ownership, thus providing investors with a perfect investment destination. Apart from the housing deficit and political stability in Accra, real estate investment is also engendered by such factors as:

Demand for high-end properties- Accra is attracting sophisticated and well-educated professionals, which has inflated the demand for better housing. Oil discovery has seen the influx of expatriates and their families move to Accra, demanding gated communities. This continues to provide investors with the opportunity to develop these demanded estates.

Convenient Weather Pattern- Accra, Ghana, has a mild climate with wet and dry seasons, ousting a daily temperature range of between 24-30 degrees Celsius. This weather makes Accra a preferred living area for many people, hence increased housing demand.

Kigali, Rwanda

Rwandan capital city Kigali has witnessed its real estate industry grow at an exponential rate in the last decade. Though plagued by genocide 20 years ago, the growth of the Rwandan economy makes the country an Eastern success story. Now is the time to hunt for real estate investment opportunities in Kigali as the city experiences growth on several grounds, including foreign direct investment, infrastructure investment, and population growth. Several factors make Kigali stand out on the podium of real state investment.

Urban Migration- Rwanda is one of the countries with the highest rise in urban migration. With many people moving to the capital city for better jobs, education, and business opportunities, one can only imagine the housing shortage. This population growth is providing investment incentives for realtors.

Kigali’s Innovation City Project- This government-supported project offers a mouth-watering opportunity for real state investors. The government set aside 70 hectares for developing world-class universities, research facilities, companies, and residential complexes, pushing the city at the forefront for real estate developments.

Nairobi, Kenya

Of the fastest growing economies Nairobi is ranked amongst the top 3. Several world organizations, such as the United Nations (UN), IBM, Google, and Coca-Cola, have their African headquarter in Nairobi, contributing to its luster for investments. Nairobi is experiencing a rise in demand for housing due to the increasing population. Additional factors that make Nairobi a viable real estate investment destination include:

High Population Growth- Increased population growth fueled by rural-urban migration and high fertility rate makes the demand for housing skyrocket. Additionally, learning institutions within and around the city are major contributors to several lucrative real estate developments.

High Return on Investment- The value of land around Nairobi appreciates at an alarming rate each year due to improved infrastructure. The rise in the cost of land leads to a rise in housing demand and the resulting return. Many businesses needing office space are guaranteed earnings.

Luanda, Angola

Luanda is considered the 5th largest economy in Africa, with the potential for continual growth. The government initiative to provide new housing property in the city shows that the demand for commercial and residential units in Luanda is still rising. The pricing for office space in Luanda is insanely high, costing $150/m2 monthly. This shows that investing in the city is a high guaranteed return on investments.

Conclusion

African cities are experiencing a huge population influx every day, and this provides real estate investment opportunities due to the shortage of housing. Africa is a new real estate investment frontier, providing a high return on investment than most developing countries. China’s insurgent into the continent underscores its value and investment growth potential. Some of the top African cities that offer unique opportunities for real estate investment are Nairobi, Lagos, Luanda, Kigali, and Accra.

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