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Everything you need to know is included in our Mauritania Property Pack
Are you considering buying real estate in Mauritania? Are you questioning if it's a good idea to buy now or if it's better to wait until next year?
Market timing is a subject where everyone has their own take. Your Mauritanian acquaintance might suggest that now is the ideal time to buy property, whereas your spouse, who is originally from Nouakchott, might have a different view and recommend waiting for more stability.
At TheAfricanvestor, when we create articles or update our pack of documents related to the real estate market in Mauritania, we base our analyses on factual data and statistics rather than opinions, minimizing biases and uncertainties.
We have carefully gathered and analyzed official reports and government website statistics. Using this information, we have created a reliable database. Here's what we found that can help you decide whether it's a good time to buy real estate in Mauritania.
We hope you find this article insightful!
How is the property market in Mauritania these days?
Mauritania is currently a highly vulnerable country
Negative
Stability should be the first thing you look at when you want to invest in real estate because it offers a solid foundation for property appreciation and returns on investment. It is an information you need as a foreigner who might buy a property in Mauritania.
Unfortunately, Mauritania does not possess the stability required to be classified as a stable country today. The last Fragile State Index reported for this country is 87, which one of the lowest scores in the world.
Mauritania is highly vulnerable due to its heavy reliance on extractive industries like mining, which makes its economy susceptible to global commodity price fluctuations, and its limited arable land exacerbates food insecurity, affecting a significant portion of its population. Additionally, the country faces challenges related to political instability and social tensions, particularly concerning ethnic divisions and the legacy of slavery, which hinder cohesive national development.
First check tells us not to invest in this country. Let's look at more data.
Mauritania is heading towards substantial growth
Positive
Second thing to do before investing in Real Estate: evaluate the country's economic performance.
Based on the IMF's outlook, Mauritania is set to conclude 2024 with a growth rate of 5.1%, which suggests the country is undergoing rapid growth. As for 2025, we're talking 5.6%.
This strong growth will continue to be there for more years to come since Mauritania's economy is expected to increase by 23.4% during the next 5 years, resulting in an average GDP growth rate of 4.7%.
Projected strong growth in Mauritania indicates a booming economy, which can lead to increased demand for housing and commercial spaces, potentially driving up property values. For an investor, this means the opportunity for higher returns on property investments as the market expands.
However, there are other factors to consider beyond GDP growth.
Mauritania's population is growing and getting (a bit) richer
Positive
When considering a real estate purchase, pay attention to 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 Mauritania, the average GDP per capita has changed by 1.4% over the last 5 years. Though not substantial, there is still a positive trend of growth. Furthermore, the Mauritanian population is growing (+21% in 5 years).
This means that, if you purchase a desert oasis retreat in Nouakchott 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 expected to increase in Mauritanian cities such as Nouakchott, Nouadhibou, or Atar in 2025.
You'll get weak rental yields in Mauritania
Neutral
Next, we will explore 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 Mauritania is purchased for 10,000,000 MRU and generates 500,000 MRU in annual rental income, the rental yield would be 5%.
According to Numbeo, rental properties in Mauritania offer gross rental yields ranging from 0.8% and 3.5%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Mauritania.
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 Mauritania Property Pack
In Mauritania, inflation is anticipated to be minimal
Neutral
In two words, inflation is when purchasing power decreases.
It's when your customary plate of thieboudienne costs 3,500 Mauritanian ouguiya instead of 3,000 Mauritanian ouguiya a couple of years ago.
If you're about to invest in a property, high inflation can benefit you:
- property values tend to increase over time, leading to potential capital appreciation
- inflation can result in higher rental rates, increasing 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, preserving the value of the investment
- diversifying into real estate provides stability during inflationary periods
- tax advantages, like depreciation deductions, can help offset the impact of inflation
In line with IMF predictions, over the next 5 years, Mauritania will have an inflation rate of 1.0%, which gives us an average yearly increase of 0.2%.
This data shows that Mauritania is expected to have near-zero inflation then. Prices won't rise and then your property investment may not appreciate.
Is it a good time to buy real estate in Mauritania then?
Time to conclude !
Considering the current state of Mauritania, it might not be the best time to buy property there in 2025. The country is highly vulnerable, which can pose significant risks for property investors. Vulnerability can stem from various factors such as political instability, economic fluctuations, or environmental challenges. These uncertainties can make property investments risky, as they might affect property values and the overall market stability.
On the flip side, Mauritania's economy is expected to grow significantly, with a projected increase of 23.4% over the next five years, averaging a GDP growth rate of 4.7%. This strong growth suggests a booming economy, which could lead to increased demand for housing and commercial spaces. While this might sound promising for property investors, it also means that property values could rise, making it more expensive to buy property in the future. So, while the market expands, the initial cost of investment might be higher.
Additionally, Mauritania's population is growing and becoming slightly wealthier, which could further drive demand for real estate. However, according to Numbeo, the rental yields in Mauritania are relatively low, ranging from 0.8% to 3.5%. This means that even though there might be demand, the returns on rental properties might not be as lucrative as one would hope. Investors need to weigh the potential for property value appreciation against the relatively modest rental income.
Lastly, while inflation in Mauritania is anticipated to be minimal, which is generally a positive sign for economic stability, it doesn't necessarily guarantee a favorable environment for property investment. Low inflation might help maintain the purchasing power of money, but it doesn't address the underlying vulnerabilities of the country. Therefore, potential investors should carefully consider these factors and possibly seek more stable markets or wait for a more opportune time to invest in Mauritania's real estate.
We hope this article has offered you practical support!. If you need to know more, you can check our our pack of documents related to the real estate market in Mauritania.
-Will real estate prices go up in Mauritania?
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.