- Several foreign real estate agencies already have entered the growing property market of Cape Verde. Having all the qualities of earlier boom markets such as Spain, Turkey and South Africa, estate agents predict that Cape Verde is set to become the world's next property hot-spot - a mixed blessing for Cape Verdeans.
Yet another real estate agency this week announced its entry on the Cape Verdean market with big words about the archipelago's qualities and potentials. London-based Ground Level Properties asks potential clients to "imagine your own Paradise Island, far away from the problems of mass tourism but less than 5 1/2 hours from London." Here, tourists are encouraged to buy their own apartment while they are still cheap.
These investments have only become possible over the last few years, with new legislation, improved infrastructure and the building of new resorts. With new flight connections being established between Europe and Cape Verde all the time, now even Britons can reach the West African archipelago easily during the northern winter tourism season.
The Cape Verdean government during the last decade has established one of the most modern and liberal investment policies to be found in Africa, coupled with political stability and democratic institutions. This has aided the Praia government in attracting foreign capital to improve infrastructure - including new airports, inter-island connections, hotels, entire new holiday resorts and restoring its rich cultural heritage. Given its pleasant climate, the archipelago - being termed "the new Canary Islands" - is seeing a strong growth in charter tourism from Europe.
Regarding real estate, developments are only in their modest beginnings. Until now, it is mostly the large tourism industry investors such as the Spanish RIU group that are investing in hotel and apartment complexes. But conditions are all in place to predict a boom to be driven by smaller investors. In addition to regulatory and infrastructure conditions, the strongly increasing marketing of Cape Verde properties is soon to bear fruits.
The British journal 'Property Investor News' recently praised Cape Verde as currently being "one of the best locations worldwide to purchase property" - a conclusion that has made many British estate agencies interested in this new market. It was "clear to see the potential of these islands and as soon as Cape Verde becomes a mainstream holiday destination the price of property here will almost certainly increase drastically," the journal held.
Professional property investors who seek to be a part of new destination developments and apartment complexes were told to "operate quickly as some of the best priced developments are now 50 percent sold and as more and more people become aware of the potential for property investment in Cape Verde, the prices will begin to rise."
The arrival of Ground Level Properties (GLP) - only the last British real estate agency to offer Cape Verdean properties - is part of this trend. GLP managing director Josh Boulton now passes on the word to the British public; "With development in its infancy, property is extremely affordable right now but values are predicted to climb steeply over the next few years as the islands’ tourism industry booms," Mr Boulton told 'Easier Property News' earlier this week.
GLP already has registered with many of the new developments currently underway. The company holds that Britons on Cape Verde face a wider choice of property "at much lower prices than other holiday islands." A one-bed beachfront fully refurbished apartment, for instance, can be snapped up for around euro 50,000 while luxury beachfront villas "with all the extras can be found for as little as euro 200,000."
Trends in Cape Verde mirror earlier developments in more saturated holiday destinations such as Spain and Turkey. In Spain - especially on the nearby Canary Islands - northern Europeans during four decades have caused a construction boom, leading to the establishment of hundreds of holiday destinations key to the local and national economy. In Turkey, the current hot-spot for European property investors, the same is happening at a very high speed.
For Cape Verdeans, the foreseen boom however may become a double-edged sword. Experiences from property booms in other countries point to a rapid and broad-based development of the tourism sector, creating local and national revenues and employment - especially in the construction and hotel/restaurant sectors. Unregulated constructions however also may have severe negative environmental side effects, in particular in countries such as Cape Verde, where water resources are scarce.
The biggest problems for local society may however become the rapidly increasing prices during a possible boom. Lucrative property soon may become unavailable for locals, and booms have a tendency of crossing over to the pricing of normal property. Spain today is experiencing Europe's highest prices for normal apartments, while Spanish salaries remain under the West European average. Turkey this year noted Europe's highest rising property prices, while South Africa topped world statistics.
Followed by a rise in property prices - which increases housing costs for normal households - other goods also tend to grow more expensive as tourists are prepared to pay more than locals. Again in Spain, the general price level during the last decade has grown higher than in Germany. These rising prices however have caused European tourists to seek cheaper destinations, such as Egypt and Cape Verde - two booming countries now profiting from inflation in Southern Europe.
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