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Everything you need to know is included in our Ivory Coast Property Pack
Are you considering buying real estate in the land of Cocoa? Are you curious if the prices are at an optimal point?
Different individuals have different perspectives on market timing. Your Ivorian friend might tell you that now is the ideal time to buy property, while your colleagues in Abidjan may think that prices will soon decline.
At TheAfricanvestor, when we create articles or update our pack of documents related to the real estate market in Ivory Coast, we dvocate for a fact-based mindset, rejecting unfounded opinions and baseless rumors.
After thoroughly analyzing official reports and statistics available on government websites, we have gathered solid information in a database. Here are our findings that can assist you in determining whether it's the right time to invest in real estate in Ivory Coast.
Happy reading, and let's dive in!
How is the property market in Ivory Coast these days?
Ivory Coast is, as of now, a vulnerable and fragile country
Negative
If you want to invest in properties, prioritize stability as it ensures future planning and financial security. It is an information you need as a foreigner who might buy a property in Ivory Coast.
Sadly, Ivory Coast is going through a period of great instability. The last Fragile State Index reported for this country is 89.6, which extremely low.
Ivory Coast is currently in a fragile state due to a long-standing political crisis that has caused deep divisions within the country and led to armed conflict. This has weakened the country's economy and infrastructure, making it highly vulnerable to further instability.
It does not seem to be the right time to buy a property in this country. Let's check more data.
Ivory Coast is forecasted to grow massively
Positive
Before investing in Real Estate, look into the economic health of the country.
According to the IMF's estimations, Ivory Coast is likely to finish 2023 with a growth rate of 6.2%, which confirms the country's quick development. Concerning 2024, we're talking 6.6%.
Ivory Coast's growth potential lies in multiple sectors such as energy, construction, mining, agribusiness, trade, telecommunications, and agriculture. Additionally, investment and consumption are expected to play significant roles in driving the country's economic expansion.
That's not all - this impressive growth will keep going on since Ivory Coast's economy is expected to increase by 29.1% during the next 5 years, resulting in an average GDP growth rate of 5.8%.
The expected massive growth in Ivory Coast means that real estate values are likely to increase significantly, providing a great opportunity for investors to make a good return on their investments. Additionally, the increased economic activity will create a more stable environment for real estate investments, making it a safer and more secure investment.
Now, let's delve into other metrics worth exploring.
Ivory Coast's population is growing and getting significantly richer
Positive
When considering buying real estate, population growth and GDP per capita require meticulous evaluation 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 Ivory Coast, the average GDP per capita has changed by 12.1% over the last 5 years. It is well above the average seen worldwide. Furthermore, the Ivorian population is growing (+3% in 5 years).
This means that, if you purchase a beachside house in Abidjan 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, the demand for rentals is predicted to increase in Ivorian cities such as Abidjan, Yamoussoukro, or Bouaké in 2024.
Properties promise really attractive yields in Ivory Coast
Positive
To evaluate the profitability of a property investment, take into account the expected rental yields.
It represents the annual rental income generated by a property divided by its purchase price or market value. For instance, if a property in Ivory Coast is purchased for 50,000,000 XOF and generates 2,500,000 XOF in annual rental income, the rental yield would be 5%.
The website Numbeo indicates that rental properties in Ivory Coast promise gross rental yields 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 Ivory Coast.
You won't get better yields in many places.
Everything you need to know is included in our Ivory Coast Property Pack
In Ivory Coast, inflation is expected to be moderate
Neutral
Simply put, inflation is the general increase in the cost of living.
It's when your favorite cup of attiéké costs 2,500 West African CFA francs instead of 2,000 West African CFA francs a couple of years ago.
If you're planning to invest in a property, high inflation can offer several benefits:
- Property values often increase over time, leading to potential capital appreciation.
- Inflation can lead to higher rental rates, thereby increasing the cash flow from the property.
- Inflation decreases the real value of debt, making mortgage payments more affordable.
- Real estate can serve as a hedge against inflation, safeguarding the value of the investment.
- Diversifying into real estate provides stability during periods of inflation.
As indicated by IMF projections, over the next 5 years, Ivory Coast will have an inflation rate of 11.2%, which gives us an average yearly increase of 2.2%.
This data is suggesting that Ivory Coast may face inflation in the near future. In such a situation, buying property now becomes an option to consider.
Is it a good time to buy real estate in Ivory Coast then?
Now it's time to draw our conclusions.
While there are some favorable signals, 2024 might not be the most opportune time for property investment in Ivory Coast due to a range of concerning factors arising from the negative signals. Despite the country's forecasted massive growth and an increasing and wealthier population, the current vulnerability and fragility of Ivory Coast's environment raise significant doubts about the stability of the investment climate.
The anticipated massive growth in Ivory Coast, although positive in theory, must be considered alongside the prevailing fragility of the country. Political instability and social challenges can undermine the projected economic growth, potentially affecting property investments and their expected returns.
While the increasing population and wealth could drive demand for housing, this potential benefit is overshadowed by the negative signal of vulnerability. The country's fragile state can hinder long-term investment stability and pose risks that investors need to carefully assess before considering property investments.
The unfavorable combination of promising yields and moderate inflation must be weighed against the country's fragility. Economic and political uncertainties can impact the consistent generation of rental income and the overall profitability of property investments in a vulnerable environment.
Considering the current vulnerability and fragility of Ivory Coast, potential investors should exercise caution. While the favorable and neutral signals might suggest opportunities, the negative signals are crucial factors to consider. The overall investment climate in 2024 is uncertain, making it essential to carefully evaluate the risks and benefits of property investment in Ivory Coast.
We genuinely hope this article has been helpful and informative to you!. If you need to know more, you can check our our pack of documents related to the real estate market in Ivory Coast.
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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.
Buying real estate in Ivory Coast can be risky
An increasing number of foreign investors are showing interest in Ivory Coast. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
