African housing market 'still in difficulty'
The outlook for African housing markets remains bleak and a large majority of the population cannot afford a property because incomes are below the level required to secure mortgage financing from banks.The outlook for African housing markets remains bleak and a large majority of the population cannot afford a property because incomes are below the level required to secure mortgage financing from banks.
However, the sector has improved over the past few years thanks to new incentives introduced by governments and an increasing interest from investors.
In Algeria, for example, new measures introduced in 2010 have contributed to an increase in preferential rate mortgages from the national saving bank (CNEP-Banque).
They grew during the first quarter of 2011, going from 142 loans worth €2 million during the initial three months of 2010 to 6,588 loans with a total value of over €85.8 million during the first six months of 2011, according to figures from CNEP-Banque published by APS news agency.
Despite this, experts are saying that even with encouraging results, the housing crisis in Africa could continue.
This is mainly due to high property prices, but also because of a shortage of properties available and a lack of long-term mortgages sources.
Housing demand continues to increase as Africa urbanises rapidly, but the ratio of mortgage debt outstanding to GDP remains low, averaging around 10 percent (compared to 70 percent in the US and 50 percent in Europe), according to figures from the MFW4A report "Financing Africa: Through the Crisis and Beyond".