Demand For Cape Verde Investment Properties
Preliminary Cape Verde Real Estate Market Analysis
As a market for direct property asset investors, Cape Verde is not projected to be driven by domestic demand. Macro-economic indicators in a tourism driven economy are analysed only to work out the extent of the dependence on external factors that are outside the scope of the country’s monetary policy, and that could impact growth. Cape Verde’s profile is remarkably favourable.
The primary source of income is FDI (Foreign Direct Investment), that unlike many [other] | prominent[/spin] emerging markets, is not contingent upon special circumstances such as EU accession, etc. Cape Verde has a well diversified base of private investment and aid organisation funding , and is not reliant on a specific commercial relationship for development and growth
Cape Verde’s mid-Atlantic position is strategically significant for trade by countries in all continents.
In addition to being awarded grant [spin]funding | packages[/spin} from various international agencies, the country’s government has successfully negotiated trade and special partnership agreements with the Eurozone, Brazil, China and the US. These markets have a vested interest in the success of Cape Verde’s development, and in particular its infrastructural modernisation.
Cape Verde is one of the emerging market economies that are growing at super speed and as such the Cape Verde Real Estate market is becoming very popular with investors.
global organisations involved in monitoring the progress of developing countries (such as the World Bank), have all published reports that demonstrate a consensus that Cape Verde has and is surpassing even the most optimistic projections.
Unlike a lot of other countries with comparableeconomic profiles, however, Cape Verde’s growth is based on a solid, well managed and sustainable program of reform and privatisation.
The main driver of Cape Verde’s economy is tourism, as it offers a superb holiday climate year-round with only a one hour time difference to the UK, and a naturally beautiful and unspoilt landscape.
Cape Verde also enjoys an exceptionally stable democratic government with minimal corruption, and has no internal ethnic or cultural divisions.
“Cape Verde enjoys remarkably peaceful stability based on its democratic political system and market based economic development policies, as well as the absence of ethnic divisions.” –US State Department 2007 Report
“Cape Verde has an efficient and generally uncorrupt bureaucracy”-UK Foreign Office 2007 Report
“The Cape Verde authorities are to be commended for their prudent macro-economic management”-IMF 2007 Policy Review
Key indications of Cape Verde’s growth include:
- Granted membership in the World Trade Organisation in December 2007
- Graduated from the UN’s list of Least Developed Countries to status as a Middle Income Country, only the second country to do so since program creation in 1971
- IMF forecast of %6.5 growth sharply revised to nearly %11 – Financial Times
- Qualified as recipient for the US aid program the Millenium Challenge Compact, by satisfying the stringent criteria of democratic principles and efficient privatization
- Entered into Special Partnership agreement with EU in November 2007
- Government has successfully negotiated major investment from China for infrastructure development as well as preferential trade partner status
Demand for Cape Verde Investment Properties
External demand for property is highly correlated to visitor numbers. Cape Verde is a unique market in that the sustainability of demand for resort property is not foreseen to be tied to domestic buying trends, even in the long-term.
The primary and potentially only driver of demand is and will be by tourists. Here again, Cape Verde has a very favourable profile, the potential of which ranges from above average to extremely high.
The official projections for tourist numbers in the next 2-5 years represent very high increases within conservative scenario analyses.
It is most likely that the estimates will prove woefully inadequate, based on the geographic diversification of visitors’ originating destinations.
Whereas most holiday destinations worldwide have disproportionate representation of visitors from specific countries or continents, to the point of dependence on that country of origin, Cape Verde is forecast to become one of a very short list of destinations that are equally supplied by visitors from all reaches of the globe.
As a case study of a developing country, Cape Verde has shown unusually progressive and strategic tactical implementation practices. Following substantial programs of structural economic reforms, the country has moved speedily and efficiently to address the prerequisites for sustainable high-end tourism.
Within a mere 2-3 years, Cape Verde will offer a destination with a naturally beautiful landscape and a year-round holiday climate, as well as an array of activities and amenities directed at a diverse but discerning tourist market, including among others championship standard golf, vast sandy beaches and sophisticated nightlife.
Due to both natural and legislated constraints on supply, and reasonable, well founded expectations for high property demand, Cape Verde’s propertymarket potential profile is unusually favourable, given the low level of risk presented and the affordability especially of Cape Verde Apartments in waterfront resort locations.
Several internationally renowned tourism brands have begun developing projects on the islands, including Hilton Hotels, Ernie Els and the PGA management group, and Nikki Beach Resorts, confirming the feasibility of Cape Verde as a mainstream but high-end holiday destination.
Unlike in other overseas investment property similar tropical climate countries like the Caribbean, price levels are still low considering these developments, translating into a rare opportunity to acquire a historically high-performing asset type at entry-level prices.
This article has been provided by Deanne DuKhan, Portfolio Strategist for Experience International www.experience-international.com
