Exactly how expensive is Angolan property?
It’s so expensive that buying property is a rarity even for wealthy expats. To buy a home you can expect to easily pay over an eye-watering $1million US dollars. A property not worth the price tag when you consider that housing conditions are generally poor. You will need to add a spare electricity generator to your property budget, as power cuts happen frequently.
Renting isn’t exactly cheap either and you should expect to pay between US$6,000 to $10,000 per month in Luanda. Generally, for most expats their international employers will foot this bill. Oil companies are willing, and obliged, to pay high prices for office space and lodgings.
However, there is hope in the construction sector as in 2010 President Dos Santos set out the goal of building one million houses by 2014. China has also seen potential in investing in Angola and has committed to rebuilding infrastructure destroyed during the war in exchange for oil.
Reasons to invest in property
Precisely because foreign investment is becoming more and more attractive to countries such as China, the UK and France, Angola is set to become an expat hot-spot.
Angola has also started to recognise the potential in tourism and has started to invest in the industry. Aside from being the second most important country in Sub-Saharan Africa for its natural resources, in good time, it may also become a tourist hub too.
Even though you will be paying a lot to buy property, rental yields are currently high as the property market is so underdeveloped. Taking out a mortgage has, in recent years, become more streamlined, as the Angolan Government has made an active effort to develop the real estate industry. However, that is not to say that investing in the Angolan property market has no risks.
Too big a risk?
Nova Cidade Kilamba, located 18 miles outside the capital Luanda, has become known as one of Angola’s ghost towns. State-owned China International Trust and Investment Corporation (CITIC), developed a residential and public programme of 750 eighty-storey apartment buildings, including a dozen schools and more than 100 retail units. It was financed by the Chinese in return for Angolan oil.
The advertised prices for one of these apartments is between US$120,000 and $200,000. Too expensive for local Angolans, who live on an estimate US$2 a day, and not in the right area for expats as you can expect a 3 hour drive into the capital. In 2012, when 2,800 apartments went on sale, only 220 were sold.
Be sure to check the area where you wish to buy property as well as potential risks before committing yourself as ghost town property that generally has little or no resale value, rental potential is also limited.