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Everything you need to know is included in our Gabon Property Pack
Are you considering buying real estate in the land of Rainforests? Are you wondering if now is a good time to make a move?
Market timing is a topic where everyone has their own ideas. Your Gabonese friend may suggest that it's currently a good time to buy property, but your business partner residing in Libreville might advise waiting for better opportunities.
At TheAfricanvestor, when we create articles or update our pack of documents related to the real estate market in Gabon, we rely on reliable data and statistics instead of personal opinions or rumors when we work.
We have carefully studied official reports and statistics from government websites, and we now have a trustworthy database with important information. Here's what we discovered, which can help you decide if it's a good idea to purchase real estate in Gabon.
We hope you find this helpful!
How is the property market in Gabon now?
Gabon is, nowadays, a relatively stable country
Neutral
Stability should be the first thing you look at when you want to invest in real estate because it attracts sustainable development and investor confidence. It is an information you need as a foreigner looking to buy real estate in Gabon.
Currently, Gabon is somewhat stable as a country. The last Fragile State Index reported for this country is 66.7, which is a decent number.
Gabon has been able to maintain stability due to its strong economic growth and political stability since the 1990s. Additionally, the country has benefited from its significant oil reserves, which have provided a steady source of income for the government.
We should now evaluate more data to see if the timing is right to buy property in this country.
Gabon is on track for significant expansion
Positive
Second thing to do before buying a property: make sure the country's economy is thriving.
According to the IMF's estimations, Gabon is set to conclude 2023 with a growth rate of 3%, which affirms the country's positive direction. For 2024, we're talking 3.1%.
Besides that, the economy will keep growing since Gabon's economy is expected to increase by 14% during the next 5 years, resulting in an average GDP growth rate of 2.8%.
The expected sustainable growth rate in Gabon is beneficial for someone who wants to invest in real estate as it indicates the potential for increased value of their investment over time. This growth rate also suggests a stable economy, which is essential for a successful real estate investment.
Nevertheless, there are other indicators to watch.
Gabon's population is declining and getting poorer
Negative
When contemplating real estate acquisitions, population growth and GDP per capita warrant careful scrutiny 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 Gabon, the average GDP per capita has changed by -2.1% over the last 5 years. It is a concerning and unsettling statistic.
You'll get weak rental yields in Gabon
Neutral
Our attention will now be directed towards the rental yield.
It represents the annual rental income generated by a property divided by its purchase price or market value. For instance, if a property in Gabon is purchased for 100,000,000 XAF and generates 5,000,000 XAF in annual rental income, the rental yield would be 5%.
According to Numbeo, rental properties in Gabon offer gross rental yields ranging from 0.4% and 3.1%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Gabon.
It means that your ability to generate substantial returns from a property investment may be limited.
Everything you need to know is included in our Gabon Property Pack
In Gabon, inflation is anticipated to be moderate
Neutral
Simply put, inflation is the erosion of purchasing power.
It's when your customary bowl of maboké costs 8,000 Central African CFA francs instead of 7,000 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.
According to the IMF's estimations, the inflation rate in Gabon will increase by 11.9% over the next 5 years, with an average annual increase of 2.4%.
This data is telling us that Gabon could experience a moderate rate of inflation in the future. Then, prices would rise. It might become more expensive to buy in the future. However, if you buy now, your investment might appreciate and you can sell for a higher value later.
Is it a good time to buy real estate in Gabon then?
Now it's time to draw our conclusions.
2024 holds promise as a favorable time for property investment in Gabon, primarily due to the country's potential for significant expansion. As Gabon aims for growth and economic diversification, the potential opportunities for property investors to benefit from an evolving market become more pronounced.
While Gabon is currently a relatively stable country, the neutral signals suggest a balance between risks and opportunities. The stability contributes to a predictable investment climate, allowing investors to plan for the long term with greater confidence.
Though weak rental yields are a concern, it's important to note that this factor could be offset by the country's expansion prospects. As the economy grows and diversifies, the demand for properties might increase, potentially leading to improved rental yields over time.
Despite moderate inflation, the overall investment landscape in Gabon remains positive when considered alongside the significant expansion plans. The relatively stable environment, coupled with the potential for economic growth, creates a foundation for property investment to thrive.
Although Gabon's population decline and decreasing wealth are negative signals, the country's efforts toward expansion and economic diversification offer a counterbalance. These endeavors can potentially reverse negative demographic trends and improve the investment climate, making 2024 a compelling time to consider property investments in Gabon.
We genuinely hope this article was useful!. If you need to know more, you can check our our pack of documents related to the real estate market in Gabon.
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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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