All sources have been thoroughly verified for credibility. Furthermore, an industry specialist has reviewed and approved the final article.
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 87.9, which one of the lowest scores in the world.
Mauritania is highly vulnerable due to its extreme poverty and its extreme dependence on foreign aid. It also suffers from a lack of access to basic services, such as healthcare and education, which further exacerbates its vulnerability.
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 2023 with a growth rate of 4.4%, which shows the country is robust. Regarding 2024, we're talking 5.1%.
That will continue to be true for more years to come since Mauritania's economy is expected to increase by 22.5% during the next 5 years, resulting in an average GDP growth rate of 4.5%.
Projected strong growth in Mauritania means that the country is likely to experience economic growth in the near future, which will create more opportunities for investors in the property market. This could potentially lead to increased demand for property and higher returns on investment.
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 (+9% 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 2024.
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 expected to soar
Positive
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 26.1%, which gives us an average yearly increase of 5.2%.
This data shows that Mauritania will probably experience strong inflation. If it's the case and you buy now, then there is a possibility that the value of the property may increase over time, potentially allowing you to sell it for a higher price and make a profit.
Is it a good time to buy real estate in Mauritania then?
Time to conclude !
Considering the current landscape, 2024 might not be the most opportune time to invest in property in Mauritania due to a combination of factors that raise concerns. Despite some favorable signals, caution is warranted. While Mauritania is poised for substantial growth, it's important to note that the country's overall development might not necessarily translate into a robust property market. Economic growth doesn't always guarantee a parallel growth in real estate values.
The growth of Mauritania's population and their increasing prosperity might not directly correlate with a thriving property market. Other critical factors, such as infrastructure, demand-supply dynamics, and regulatory stability, play pivotal roles in determining the attractiveness of the real estate sector for investors.
One significant red flag is the expected inflation surge in Mauritania. High inflation can erode the purchasing power of potential buyers and impact the affordability of properties. This could lead to uncertain market conditions and potentially hinder property value appreciation.
Furthermore, the weak rental yields in Mauritania contribute to the less favorable investment landscape. Low rental yields limit the potential income that investors can generate from their properties, reducing the attractiveness of real estate as an investment option.
Perhaps most concerning is the fact that Mauritania is currently classified as a highly vulnerable country. This vulnerability can encompass economic, political, and social aspects, all of which could negatively impact property ownership and investment stability. These challenges could make property investment in Mauritania a risky proposition in 2024, demanding thorough evaluation and careful consideration.
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.
-Is it a good time to buy a property in Senegal?
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 Mauritania can be risky
An increasing number of foreign investors are showing interest in Mauritania. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
