THERE are a number of opportunities in the Mineral-rich Democratic Republic of Congo (DRC) real estate sector, but potential investors must ensure they have investigated thoroughly before committing huge resources.
Doing business in the DRC is difficult, with the country often considered to be one of the most challenging business environments in the world.
Despite a wealth of natural resources, years of corruption, mismanagement and conflict have left the country impoverished and there is still much work to be done to rebuild the DRC.
In the World Bank’s Ease of Doing Business Survey for 2018, the DRC was ranked 184 out of 190 countries, reflecting the poor business environment that Investors are likely to encounter.
That being said, there are also many opportunities for property investors looking for a double digit returns over time despite challenges that faces the country.
DRC is the most populous country in the central African region and property developers expect its legal and political structures to synchronise eventually in order to build up the country’s real estate sector.
The country has large areas of arable land and is awaiting “big investments”.
With a population of more than 80 million which covers an area the size of western Europe, a projected GDP growth of 3.8% for 2019 and significant untapped minerals resources, the DRC certainly holds much potential.
Real estate market in the country is vast, especially for urban centres, like Kinshasa, Lubumbashi, Kisangani, Goma, Kolwezi, Bukavu and Matad.
Sustained population growth over the last thirty years and the changing socio-economic development led to a rapid development of Congolese towns and a strong demand relative to supply.
Currently, the sector is characterized by a very low number of property developers and the lack of institutions specializing in funding real estate projects.
Property stands out, in response to Government efforts to address the acute housing deficit, particularly among the urban populations in the cities of Kinshasa and Lubumbashi. However, the price of units (above US$ 25,000) is well above the affordability scale for a typical working lower middle income household in Kinshasa (about US$ 500).
DRC has a housing deficit of about 4 million units, while the annual housing requirement is close to 250,000 units. The housing requirement in Kinshasa alone, is estimated at about 140,000 units annually, according to the Centre for Affordable Housing Finance in Africa (CAHF) 2018 report.
Although the demand for affordable housing is evidently high, the few past and ongoing housing projects are skewed towards the needs of middle-income and wealthy individuals. These individuals earn above US$ 1,000, and constitute less than 10 percent of the population).
The dominant sectors of the Congolese economy are mining, agriculture, fishing and forestry. There is also some manufacturing, particularly of textiles, cement and wood products. The main centres of business are the capital, Kinshasa and Lubumbashi, in the mining district of Katanga.
africapropertynews.comFollow Us on Social Media