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Everything you need to know is included in our Cameroon Property Pack
Are you thinking of investing in property in Cameroon? Are you contemplating whether you should make a purchase now or in the coming year?
When it comes to market timing, everyone has their own opinion Your Cameroonian colleague might suggest that now is the opportune time to buy property, whereas your friend from Douala may advise exercising a bit more patience before making a decision.
At TheAfricanvestor, when we create articles or update our pack of documents related to the real estate market in Cameroon, we prioritize evidence-based work, relying on reliable data and statistics rather than personal opinions or rumors.
We have gone through official reports and government website statistics in great detail. As a result, we have created a reliable database filled with valuable information. Here's what we found, which can help you decide whether it's the right time to buy real estate in Cameroon.
We hope you find this article helpful!
How is the property market in Cameroon now?
Cameroon is, today, not a stable country
Negative
Stability should be the first thing you look at when you want to invest in real estate because it ensures future planning and financial security. It is an information you need as a foreigner looking to buy real estate in Cameroon.
Regrettably, Cameroon is currently in an unstable state. The last Fragile State Index reported for this country is 96, which puts it in the bottom 20 globally.
Cameroon has a long history of political unrest and violence, and the current government is facing increased pressure from separatist groups who are demanding more autonomy. Additionally, the country is facing many economic and social issues, such as poverty, unemployment, and corruption, which have contributed to the instability.
First check is not great. Let's review more data.
Cameroon is poised for significant growth
Positive
Before investing in properties, assess the country's economic strength.
According to the IMF's estimations, Cameroon will, in 2023, grow by 4.3%, which is a strong number. Concerning 2024, we're talking 4.4%.
That will continue to be true for more years to come since Cameroon's economy is expected to increase by 20.2% during the next 5 years, resulting in an average GDP growth rate of 4%.
Cameroon's projected strong growth indicates a strong and positive economic outlook, making it a great opportunity for those looking to invest in property in the country. The growth in the economy also suggests a growing population, which could lead to an increase in demand for property and potentially higher returns on investments.
That said, GDP growth is just one piece of the puzzle!
Cameroon's population is growing and getting (a bit) richer
Positive
Before you buy a property in a country, think about population growth and GDP per capita, because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Cameroon, the average GDP per capita has changed by 0.0% over the last 5 years. The growth, although minimal, is still present. Furthermore, the Cameroonian population is growing (+6% in 5 years).
This means that, if you purchase a spacious house in Douala and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, there might be a rise in rental demand in Cameroonian cities like Douala, Yaoundé, or Bafoussam in 2024.
Rental yields are really attractive in Cameroon
Positive
If you want to know if a property investment can yield profits, study the expected rental yields.
Rental yield is the return on investment you can expect from renting out a property, expressed as a percentage.
According to Numbeo, rental properties in Cameroon offer gross rental yields ranging from 6.1% and 8.8%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Cameroon.
Yields like these are rare to come by.
Everything you need to know is included in our Cameroon Property Pack
In Cameroon, anticipate strong inflation
Positive
Inflation is the steady increase in the prices of everyday items.
It's when your go-to plate of ndolé costs 3,000 Central African CFA francs instead of 2,500 Central African CFA francs a couple of years ago.
If you're contemplating investing in a property, high inflation can offer several advantages:
- Property values have a tendency to increase over time, potentially leading to capital appreciation.
- Inflation can result in higher rental rates, thereby increasing the cash flow from the property.
- Inflation reduces the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, effectively preserving the value of the investment.
- Diversifying into real estate provides stability during inflationary periods.
As indicated by IMF projections, over the next 5 years, Cameroon will have an inflation rate of 15.5%, which gives us an average yearly increase of 3.1%.
This data means that Cameroon is anticipated to encounter inflation, making it a potentially opportune time to buy property. If the property's value increases over time, you can sell it at a higher price and make a profit.
Is it a good time to buy real estate in Cameroon then?
Time to conclude !
When assessing the landscape, 2024 might not be the most opportune time for property investment in Cameroon, given the range of signals that raise concerns. Despite indications of potential growth and an expanding population with improved financial status, the negative factors outweigh the favorable ones. The instability of Cameroon as a country introduces significant risks that could impact property investments.
Although attractive rental yields seem appealing, these must be viewed through the lens of Cameroon's overall stability. The country's current instability could affect property ownership and returns on investment, making it a risky venture even with potentially high rental yields.
Additionally, the anticipation of strong inflation in Cameroon raises caution. While inflation might indicate higher property prices, it can also erode the purchasing power of potential buyers, affecting the affordability and demand for properties.
In conclusion, despite some favorable signals like growth potential, an improving population, attractive rental yields, and inflation, the overarching negative signal of Cameroon's instability makes 2024 a less favorable time for property investment. The country's current state of instability introduces significant uncertainties that could impact property values, ownership rights, and overall investment returns.
We sincerely hope this article has been helpful!. If you need to know more, you can check our our pack of documents related to the real estate market in Cameroon.
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This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
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