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Everything you need to know is included in our Algeria Property Pack
Are you thinking of investing in real estate in Algeria? Are you pondering if it's the right time to make a move?
Everyone has their own viewpoint when it comes to market timing. Your Algerian colleague might suggest that now is a perfect time to invest in property, whereas your spouse, who is originally from Algiers, might have a different view and recommend waiting for more stability.
At SandsOfWealth, when we create articles or update our pack of documents related to the real estate market in Algeria, we make decisions based on evidence and trustworthy data rather than subjective opinions or hearsay.
We have carefully gathered and analyzed official reports and government website statistics. Using this information, we have created a reliable database. Here's what we found that can help you decide whether it's a good time to buy real estate in Algeria.
We hope you find this helpful!
How is the property market in Algeria now?
Algeria is, today, a relatively stable country
Neutral
If you want to invest in properties, prioritize stability as it offers a solid foundation for investment growth and returns. It is an information you need as a foreigner buying a property in Algeria.
These days, Algeria is experiencing a notable degree of stability. The last Fragile State Index reported for this country is 68.6, which is an acceptable number.
Algeria's relative stability today can be attributed to its substantial oil and gas reserves, which provide significant revenue and enable the government to maintain social programs and subsidies that help mitigate public discontent. Additionally, the legacy of the brutal civil war in the 1990s has led to a strong security apparatus and a cautious political environment, where both the government and the populace prioritize stability over potential unrest.
Let's examine other data now to see if it's the right moment to purchase property in this country.
Algeria will keep growing in the next 5 years
Positive
Second thing to do before investing in Real Estate: check the economic viability of the country.
As indicated by IMF projections, Algeria will end 2024 with a growth rate of 3.9%, which shows the country is on the right path. For 2025, the consensus estimate is 3.1%.
Besides that, the economy will keep growing since Algeria's economy is expected to increase by 13.1% during the next 5 years, resulting in an average GDP growth rate of 2.6%.
The expected sustainable growth rate in Algeria indicates a stable and growing economy, which can lead to increased demand for real estate as more people and businesses seek properties. This growth can drive property values up, offering potential investors the opportunity for good returns on their investments.
Let's now look at other metrics.
Algeria's population is growing but getting poorer
Negative
Before you buy a property in a country, think about population growth and GDP per capita, because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Algeria, the average GDP per capita has changed by -4.6% over the last 5 years. It's not a good number. However, the Algerian population is growing (+12% in 5 years).
No high rental yields in Algeria
Neutral
Now, we have to look at the rental yield.
It represents the annual rental income generated by a property divided by its purchase price or market value. For instance, if a property in Algeria is purchased for 10,000,000 DZD and generates 500,000 DZD in annual rental income, the rental yield would be 5%.
Based on the data provided by Numbeo, rental properties in Algeria promise gross rental yields from 1.8% and 4.5%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Algeria.
It indicates a moderate level of income generation.
Everything you need to know is included in our Algeria Property Pack
In Algeria, expect minimal inflationary effect
Neutral
In two words, inflation is when currency weakens.
It's when your usual plate of couscous costs 800 Algerian dinars instead of 700 Algerian dinars a couple of years ago.
If you're considering investing in a property, high inflation can bring you several advantages:
- Property values tend to increase over time, leading to potential capital appreciation.
- Inflation can result in higher rental rates, thereby increasing the cash flow from the property.
- Inflation reduces the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, preserving the value of the investment.
- Diversifying into real estate provides stability during inflationary periods.
As projected by the IMF, the inflation rate in Algeria will increase by 1.0% over the next 5 years, with an average annual increase of 0.2%.
This data is telling us that Algeria is anticipated to experience negligible inflation. Unfortunately, in the absence of inflation, purchasing a property now may not result in substantial price increases or substantial profits in the future.
Is it a good time to buy real estate in Algeria then?
Time to conclude !
Algeria is currently a relatively stable country, which is a crucial factor when considering property investment. Stability often translates to a predictable market environment, reducing the risks associated with property investments. This stability can provide a solid foundation for economic growth and development, making it an attractive time to consider buying property in the country. With a stable political and social climate, investors can feel more confident about the long-term prospects of their investments.
Looking ahead, Algeria's economy is expected to grow by 13.1% over the next five years, with an average GDP growth rate of 2.6%. This anticipated economic growth suggests a positive outlook for the country's real estate market. As the economy expands, there is likely to be an increased demand for real estate from both individuals and businesses. This demand can drive up property values, offering potential investors the opportunity for good returns on their investments. A growing economy often leads to more job opportunities and higher disposable incomes, which can further fuel the real estate market.
While Algeria's population is growing, it is also facing economic challenges, with many people experiencing financial difficulties. Despite this, the demand for housing remains, as people still need places to live. This situation can create opportunities for investors, especially in the rental market. According to data from Numbeo, rental properties in Algeria offer gross rental yields ranging from 1.8% to 4.5%. These yields can provide a steady income stream for property investors, making it a potentially lucrative market for those looking to invest in rental properties.
Another factor to consider is the minimal inflationary effect expected in Algeria. Low inflation can help maintain the purchasing power of money, making it easier for people to afford property. This can lead to a more stable real estate market, as property prices are less likely to be affected by inflationary pressures. For investors, this means that the value of their investments is more likely to be preserved over time, providing a sense of security and stability. Overall, the combination of economic growth, stable conditions, and favorable rental yields makes 2025 a potentially good time to buy property in Algeria.
We sincerely hope this article has been helpful!. If you need to know more, you can check our our pack of documents related to the real estate market in Algeria.
-Will real estate prices go up in Algeria?
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.