REAL ESTATE FINANCING IN SENEGAL
Want to buy a house in Senegal? Would you like to move to Dakar?
Senegal is one of Africa's top destinations, and you may be tempted to buy a property there. In recent years, however, the demand for housing has outstripped supply, and prices have risen considerably.
There's only one option: mortgages. Unfortunately, this too is on the increase.
A steadily rising mortgage rate:
From 6.4% in December 2017, the average rate on loans granted by banks rose to 8.69%.
Since January 2018, Senegalese banks' home loan rates have become higher than those in Togo (8.5%) and Côte d'Ivoire (7.96%).
Over the past three years, the average interest rate on home loans in Senegal has been higher than the annual average for all countries in the West African Economic and Monetary Union (UEMOA).
The West African Economic and Monetary Union is made up of Senegal, Côte d'Ivoire, Togo, Benin, Mali, Niger, Guinea Bissau and Burkina Faso.
Senegalese banks and mortgages:
Many national and international banks are represented in Senegal. The most common banks are : CBAO (Attijariwafa bank), Société Générale, BHS (Banque de l'Habitat du Sénégal) and BICIS (BNP Paribas).
All these banks have different offers for people interested in mortgages.
The range of mortgages on offer continues to grow. The Banque de l'Habitat du Sénégal (BHS), for example, offers a credit real estate in Senegal A 25-year "Immo Loan" at 7%.
One mortgage offer may be less attractive than another in terms of cost, but with more advantageous conditions. It's a good idea to analyze not only the cost of a loan, but also its terms and conditions.
Solutions to rising mortgage rates :
Senegal has integrated Islamic finance into its local economy. Islamic banks in Senegal offer halal financing or halal loans: the Mourabaha.
The Islamic bank itself buys the property on the real estate market.
It becomes the owner of the property and then resells it with payment facilities over a maximum period of 15 years and a pre-agreed price margin.
Finally, Senegalese and foreign investors have invested in large-scale projects to fill the housing gap. These projects are not limited to Dakar, but also include other Senegalese cities: Diamniadio or Mbour for example.
The 'Diamniadio Lake CityAt a cost of over two billion euros, this is one of Africa's most ambitious real estate projects.
The rising cost of mortgages in Senegal is problematic, as it is preventing thousands of Senegalese people from owning their own home. Large-scale rental projects and the arrival of new banks will surely make it easier to obtain a mortgage in the years to come.