Being one of the most accessible islands of the Indian Ocean, Mauritius has not only established itself as a luxury holiday destination, but it is also starting to gain a good name for property investors worldwide. One of the plans of the Mauritian government is to fast track this growth with the so called Integrated resort Scheme (further discussed below).
Mauritius lies approx 1,000 km to the east of Madagascar and offers expat buyers a new life among palm fringed beaches and the turquoise blue waters of the ocean. To top off the lure of the paradise, Mauritius also fully embraces its many ethnic roots. British, French, Indian and African influences are seen all around the island which further attracts people from all over the world.
Considered politically and economically stable, Mauritius consistently re-invents itself to stay in the global game. Back in October 2008, the Economist praised the Mauritian government for their economic foresight. They further highlighted the continuous rise in the island’s GDP and put the spotlight onto the global ranking for the World Banks’ business ratings. Ranking at 24th, the tiny island nation beat their bigger brothers and sisters like Germany, France and every other African nation by some considerable margin.
Buying a beachfront property is very much possible in Mauritius, but listings are reduced due to limited supply. For those lucky enough to grab a beachfront lot, they might be able to buy for a bargain as seen in these listings. A beachfront lot retails for a mere $64,400. Real estate is priced at all levels, from affordable to luxurious, depending on the location and type of property. Investors who are quick to act might just snap one of the last bargains of the island before the real estate market really takes off.
Even so Mauritius is a relative young property market (it only opened four years ago), many people fear that the newly invented IRS projects (Integrated Resorts Scheme) will result in a negative turn of events.
This would be a loss to the awakening market as buyers are only just now starting to realize that there is actually a market at all. This puts Mauritius into a great position if they are willing to learn from other country’s mistakes in the past.
The primary reason for buying real estate by expat buyers is to either relocate onto the emerald green island with its beautiful white sandy beaches, or distribute their wealth by buying assets. Opposed to other markets such as Dubai, Mauritius isn’t being a speculative market either. Currently it is straightforward and simple.
Current demand outnumbers supply
One reason why this is the case is because of the limited real estate availability on the island. This is mainly due to limited space to start with.
A situation like the one in Mauritius offers massive potential for developers and current property owners. With over 2,000 expats already living on the island, demand to buy will soon increase once they realize their rights to buy at least one property.
Many live in rentals which apparently is a nightmare. There just aren’t enough to supply the growing demand. So something has to be done to satisfy this demand in the near future.
Ex-Mauritian natives who went in search of fortunes years ago are now nearing their retirement ages and are also believed to want to return to their home island to live their lives in a fashionable matter. After all, this is where their roots lie. And the good thing is they can as they have amassed considerate wealth to return back to the island. The bad news is that there are far from enough properties to keep buyers happily supplied with choices.
All of these facts indicate that an opportunity exists to lift the Mauritian real estate market to another level. The problem with the IRS projects is that one would need considerate capital to build these developments. Most developers can’t afford this so therefore these projects are far few and between.
A Question of Marketing the Right Product
The ultimate success of the market in Mauritius will lie in the ability in which the island will market its assets to potential buyers.
Not only will more foreigners ultimately mean a higher GDP, but where monies are being invested there usually is a thriving economy. In 2007, the islands GDP grew by 5.6%.
One thing is for sure, Mauritius is at the cusp of something bigger than they can possibly imagine right now. Whether they will realize this is down to the people who make the marketing decision for the islands property market.
Duty Free by 2010
A potential massive attraction factor is the plan to make Mauritius duty-free by 2010. Tax-free shopping certainly provides great lure for tourism. This would also attract holiday makers who aren’t interested in settling on the island as they can also benefit from the The Real Estate Scheme (RES).
The scheme allows small landowners to develop freehold land of no more than 10 hectares for sale mainly to non citizens’. These developments can incorporate leisure and commercial facilities as well as residential units.
Property in a RES scheme can be bought by foreign nationals, companies and trusts. Residency however is not offered to those who do. Prospective buyers must send an application to the BOI (a processing fee of R2900 applies), To acquire such property.
Photo credits: Lionoche [via flickr]