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Everything you need to know is included in our Senegal Property Pack
Are you thinking of investing in property in Senegal? Are you unsure if it's better to buy now or wait until next year?
Different individuals have different perspectives on market timing. Your Senegalese friend might suggest that now is the worst time to buy property, whereas your business partner in Dakar may have a different opinion and recommend taking advantage of the current market.
At TheAfricanvestor, when we create articles or update our pack of documents related to the real estate market in Senegal, we base our work on facts and data we can trust, not 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 Senegal.
Let's get started!
How is the property market in Senegal now?
Senegal is, today, a relatively stable country
Neutral
Stability is a necessary condition when investing in real estate because it safeguards against economic downturns and minimizes investment volatility. It is an information you need as a foreigner looking to buy a property in Senegal.
In today's context, Senegal can be regarded as a country that has achieved stability to some extent. The last Fragile State Index reported for this country is 72.1, which is a respectable number.
Senegal has had a long history of peaceful transitions of power, and the current president Macky Sall has implemented reforms to strengthen the country's democratic institutions and reduce corruption. Additionally, Senegal has strong economic ties with other countries in the region, and has also seen a steady rise in foreign investment, which has contributed to a more stable economy.
Let's analyze other data now to assess whether it's a favorable time to purchase property in this country.
Senegal is forecasted to grow massively
Positive
Second thing to do before buying a property: consider the country's economic condition.
In accordance with IMF projections, Senegal is likely to finish 2023 with a growth rate of 8.3%, which confirms the country's quick development. As for 2024, the consensus estimate is 10.6%.
Senegal's ambitious growth can be attributed to several factors. The country will experience advancements in agriculture, an increase in oil production, lower inflation rates, and improved management of government finances. Additionally, the start of exporting hydrocarbons will further enhance Senegal's economic situation.
That's not all - this impressive growth will keep going on since Senegal's economy is expected to increase by 33.1% during the next 5 years, resulting in an average GDP growth rate of 6.6%.
Senegal's expected massive growth provides a great opportunity for investors in real estate, as property values are likely to increase as the economy expands. This means that real estate investments made now could be very profitable in the future.
Let's now look at other metrics.
Senegal's population is growing and getting richer
Positive
Before you purchase real estate, take a moment to consider 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 Senegal, the average GDP per capita has changed by 5.8% over the last 5 years. It's a good number. Furthermore, the Senegalese population is growing (+8% in 5 years).
This means that, if you purchase a beachfront villa in Dakar 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 an increase in rental demand in Senegalese cities like Dakar, Thies, or Saint-Louis in 2024.
Properties promise really attractive yields in Senegal
Positive
If you're interested in a profitable property investment, consider the expected rental yields.
Rental yield is the measure of how much money you can earn from renting out a property compared to its cost.
Based on the data provided by Numbeo, rental properties in Senegal promise gross rental yields from 6.3% and 9.0%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Senegal.
You won't get better yields in many places.
Everything you need to know is included in our Senegal Property Pack
In Senegal, inflation is expected to be moderate
Neutral
Inflation is the steady increase in the prices of everyday items.
It's when your customary plate of Thieboudienne in Dakar costs 8,000 CFA francs instead of 6,000 CFA francs a couple of years ago.
If you're considering investing in a property, high inflation can bring you several advantages:
- Property values tend to increase over time, leading to potential 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, preserving the value of the investment.
- Diversifying into real estate provides stability during inflationary periods.
According to the IMF, over the next 5 years, Senegal will have an inflation rate of 9.3%, which gives us an average yearly increase of 1.9%.
This data infers that Senegal 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 Senegal then?
Let's wrap things up!
2024 presents a compelling opportunity for property investment in Senegal, supported by several favorable signals that point toward a conducive environment for real estate endeavors. The forecasted massive growth in Senegal's economy indicates a positive landscape for property investment. Economic expansion often correlates with heightened demand for housing and properties, potentially leading to capital appreciation over time.
The growing population and improving financial status of Senegal's residents contribute to the attractiveness of property investment. As the population's prosperity increases, the demand for housing and real estate is likely to rise, fostering potential opportunities for both capital appreciation and rental income.
The promise of really attractive rental yields enhances the appeal of property investment. High rental yields suggest the potential for substantial returns on investment through rental income, making real estate an appealing option for those seeking steady and potentially lucrative returns.
With relatively stable country conditions and projected moderate inflation, the combination of growth potential, population prosperity, attractive rental yields, and a stable investment climate makes 2024 a promising year to consider property investment opportunities in Senegal.
We genuinely hope this article has provided you with valuable insights and information.. If you need to know more, you can check our our pack of documents related to the real estate market in Senegal.
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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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