Cape Verde Properties For Sale
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Prices of properties in Cape Verde have come down significantly following the global economic downturn. In reality they got over heated for a couple of years and we are now at more normal levels. Property prices in Cape Verde are now more realistic, but still negotiable.
The property market in Cape Verde had traditionally been a cash business and the Europeans (mainly the Italians) had been the main buyers.
Following the "Place in the Sun" program on Channel 4 in February 2005, a huge amount of interest suddenly came from British and Irish investors.
This was credit driven, as many investors were relying on mortgage in Cape Verde or in the UK to fund their property investments. When the availability of credit disapeared, the demand also fell.
Many agents of Cape Verde property effectively miss-sold to investors. These unregulated individuals and companies sold lots of property based on the fact that mortgages in Cape Verde were easy to achieve. In reality raising mortgages in Cape Verde had never been easy and following the credit crunch it is now even more difficult.
Lots of UK and Irish property investors bought expensive property in resort style developments at the top of the market in 2006-07, when credit conditions were somewhat different to what they are now. Many developers offered 30-50% initial payment at contract and the rest at the finish of build. The assumption being that a mortgage would be available for the payments at completion. Many of these developments had a 3-5 year timeline and are now coming up for completion.
Many property investors were attracted by the promise of guaranteed rental income for the first 2-3 years. Little did they know that most developers were simply adding the guaranteed rental income to the price. Or the rental income was only available if the investor bought the massively expensive furniture pack from the developer. Either way the property investor was paying for the rental income upfront.
The result is that there are now many distressed sellers in the market who are unable to complete on their off-plan contracts. This represents a real opportunity for those property investors who have the cash or access to credit.
We have developed a very good relationship with Mortgage Brokers for Cape Verde. We are happy to refer clients to them and if it is possible for you to raise a mortgage they will let you know.
Many developers and agents have left the property market in Cape Verde. A substantial increase in the supply of properties is unlikely in the near term, especially given the limited credit conditions. As the housing stock in Cape Verde is relatively small, it will not take a huge shift in demand to get the property market going again.
Significant investment in infrastructure has helped the Cape Verde property market enter the list of the top jurisdiction for European investors. As Cape Verde is still a relatively new emerging market, investment in property is transforming the country. The development of the tourism industry is still in its infancy, so as the number of visitors to Cape Verde grows, the property market will start to gain momentum again.
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