Real estate markets have endured some serious blows in recent years, and the buying power of consumers has decreased. The number of second-home buyers is plummeting, and the recovery is sluggish at best. Still, some lesser-known markets surprise us with their performance and issue a challenge to traditional, strong players like Europe. One of the rising markets is the one of Maputo, capital city of Mozambique. Built back in the colonial age to accommodate 300,000 inhabitants, it is now a burgeoning urban landscape nurturing 2,5 million souls.
Beware! Construction in progress
It has not always been so, but today you can see cranes and skyscrapers under construction throughout the city. This has sparked much interest for doing business in this part of Africa, so Maputo is experiencing an influx of foreign investments. The economy of the country is growing at a great rate, particularly in the energy and communication industry. This mesmerizing land is endowed with resources, and tourists are flocking to stunning beaches and island paradises. In the city center, you can see modern offices and apartments, while waterfront of Maputo has some old colonial style buildings.
The surge of real estate market in Maputo has put a serious strain on infrastructure and congestion. The government is working hard to tackle these issues and transform the capital into a fully modern city. Look at the example of the northern suburb of Triunfo, which used to be just an empty basin a while ago. Now, after the rejuvenation of the Marginal Avenue and construction of the Circular Road Ring, it is turning into a prime area for real estate hunters. Many other exciting and ambitious projects are underway, shifting the outlook of the urban jungle.
The circle of urban life
Maputo is now on the radar of many international corporations, and some of them have already made their home there. The demand for both commercial and residential space is on the roll, and the supply struggles to meet it. This results in over-inflated housing prices. For a commercial space in the city center you would have to come up with at least $28 p/m2, and you can hope to rent an apartment for a price tag between $3000 and $6000. Until supply catches up with the rising demand, expect these prices to stay. Some people claim that the bubble may burst, but many indicators suggest otherwise.
This is all a natural real estate growth cycle that will not stop in the foreseeable future. It is expected, though, that in a couple of year’s time the market will cool off and bring about more competitive price range. New apartment blocks and condos will remain expensive, but that is to be expected pretty much anywhere in the world. It is already possible to reap nice yields, so there is not much reason to hesitate. Foreign homeowners and landlords enjoy numerous benefits, especially in the investment property area. However, they still experience logistic problems and challenges like tons of paperwork, high taxes and confusing legalities.
Think locally
Before embarking on an African adventure, do your homework and come to understand what you are getting yourself into. Also, due to global economic volatility and climate of uncertainty, it is always a good idea to check global investment guides for the real estate markets. Understanding a local culture and habits can help you strike a good lease agreement, which is important for avoiding additional costs. Things like upfront three months payment deposit is common, while the contract should state who pays the utilities and maintenance. It is advisable to conduct credit, background and company checks for foreigners that just relocated to the city.
Those seeking to rent or buy property can also turn to online resources like propertymaputo.com. A range of choices is astounding and the quality is on par with much more developed countries. Armed with knowledge, caution and determination, there is no reason not to give Maputo a chance. Apartments are selling at a staggering rate, and investors are trying to get their hands on every inch of space they can find. This is only the beginning, and the sun will shine even brighter above the charming city of Maputo.
A rising tide
Once a dormant, colonial town, Maputo is now an expanding and cosmopolitan city offering great opportunities to investors. It still has its fair share of problems, but considering the results so far, it seems that this will be sorted out in due time. The most developed city in Mozambique is no heaven for real estate, but it is getting there.
It offers a dynamic market, beautiful urban environment, tourist amenities and attractive yields on investment. The time is right, and it can be felt in the refreshing breeze coming from the Indian Ocean and in its restless waters that snuggle up pristine beaches of Maputo. The city never sleeps and it does not intend to, as long as the boats are floating on the rising tide.