Algerian Property Market In 2022
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Loading... - Bakula Jahan
- 09 Aug 2022
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If you’re looking to sell apartments in Algeria fast, you will find that it’s difficult to sell to the locals because of how expensive Algerian real estate is. It is beyond the means of most people in Algeria and it’s especially difficult for young people. Many young people in Algeria are forced to live with their parents because of how expensive it is to buy apartments of their own.
One such young person who is struggling to get by is Salim Medhi, an engineer, who returned to his native Algeria after 5 years abroad. Even after 8 years of coming back, Salim still lives with his parents, unable to afford a place of his own. As he says, “It’s crazy what is happening in Algeria. With the current prices per square meter, I could buy a house with a garden in Montreal.”
As Salim explains, “The average Algerian is caught between a rock and a hard place. There are state-owned banks that hold the majority of assets, but to get a mortgage you have to have the right connections, and private banks are worried about extending credit because there isn’t enough information on whether people can repay or not.”
The country has seen civil wars in the past, but the lack of affordable housing is one of the gravest issues in Algeria right now, causing a conflict between the haves and have-nots. The government has been aware of this and has increased housing subsidies for the poor and the lower middle class substantially, but the problem only seems to have become worse.
The worst affected are the upper middle class, who are not rich enough to afford the high-end homes and apartments for sale, and not poor enough to be given the subsidies. So most end up staying with parents and even delaying their marriages, because of lack of living space.
As Riccardo Fabiani, a North Africa analyst at Eurasia Group explains, “The government is aware that this is one of the triggers, potentially, of a revolt. Memories of the civil war are still probably the biggest factor in containing social rage, but the question is how long does this last?”
The capital of Algeria, Algiers, is home to over 3.5 million people and it seems to be the worst affected because of the housing crisis. In the suburb of Garidi, a simple three-bedroom apartment costs over 18 million dinars, up by 5 times over the last decade. This is equivalent to 27 times the average household salary in Algeria.
As Salim explains, “I want a three-bedroom apartment in a nice neighbourhood, but 13 million dinars is above my means. I’m not above looking in poor areas, but even that’s beyond my means.” In Algiers, the prices range 100,000 to 300,000 dinars in even the poorest areas in the country – that’s how expensive real estate here is.
As Abdelhakim Aouidat, president of the Federation Nationale des Agences Immobilieres says, “When an apartment cost 3 million dinars, it was more or less affordable. When it costs 10 million dinars, that’s really tough. We need at least 18 million homes to solve this crisis and whatever the state does, it won’t be able to fix this problem quickly”. Read More...
