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Algeria's property market is experiencing significant growth with varying dynamics across major cities. The residential market shows strong fundamentals with Algiers averaging 60,000-120,000 DZD per square meter, while Oran commands higher prices at 150,000-200,000 DZD per square meter, and Constantine offers more affordable options at 30,000-60,000 DZD per square meter.
Property prices have risen considerably over the past decade, with Oran showing the strongest growth at 24.9% annually in 2024, while Algiers posted more moderate increases of 7.2%. Housing demand continues to outpace supply nationwide, despite government programs targeting 579,500 new units annually through the AADL3 initiative.
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Algeria's property market shows strong momentum with significant price variations across cities and ongoing supply-demand imbalances.
Government housing programs aim to deliver over 500,000 units annually while mortgage financing remains limited compared to cash transactions.
| City | Price per sqm (DZD) | 2024 YoY Change | Rental Yield | Market Status |
|---|---|---|---|---|
| Algiers | 60,000-120,000 | +7.2% | 6-8% | Stabilizing |
| Oran | 150,000-200,000 | +24.9% | 5-7% | Strong Growth |
| Constantine | 30,000-60,000 | Moderate | Variable | Affordable |
| National Average | 80,000-140,000 | +10-15% | 5-8% | Supply Shortage |
What is the current average price per square meter for residential properties in major Algerian cities?
As of September 2025, residential property prices vary significantly across Algeria's major cities.
Algiers commands the highest prices in the country, ranging from 60,000 to 120,000 DZD per square meter, which equals approximately $1,770 USD at current exchange rates. The capital's premium neighborhoods and central districts drive these elevated prices due to strong demand and limited supply.
Oran shows even higher price points, with residential properties averaging 150,000 to 200,000 DZD per square meter, approximately €1,360 in the city center. The coastal city's strategic location and economic importance contribute to these premium valuations, making it the most expensive market in Algeria.
Constantine offers more affordable options, with prices ranging from 30,000 to 60,000 DZD per square meter. This eastern city provides better affordability for investors and homebuyers seeking entry into Algeria's property market.
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How have property prices changed annually over the past 5 to 10 years in Algeria?
Algeria's residential property market has experienced substantial price appreciation over the past decade, with varying growth rates across different cities.
Algiers recorded a 7.2% price increase in 2024, showing signs of stabilization after years of stronger growth. Current forecasts indicate continued moderate growth of 3-7% for 2025, though some premium neighborhoods experienced year-on-year decreases of up to 14.8% as the market corrects from previous highs.
Oran demonstrates the most dramatic price appreciation, posting a remarkable 24.9% annual increase in 2024. This coastal city continues to show strong momentum, particularly in the city center and coastal districts where demand from both residents and investors remains robust.
Constantine and other secondary cities have experienced more moderate but steady growth, typically ranging between 5-12% annually over the past five years. Urban centers and premium neighborhoods consistently outperform suburban and rural areas in terms of price appreciation.
The overall trend shows higher absolute and percentage growth concentrated in urban centers, with more moderate increases beyond city cores due to infrastructure and amenity limitations.
What is the current level of housing demand compared to available supply?
Algeria faces a persistent housing shortage with demand significantly outpacing supply across all major markets.
The housing unit shortfall continues to grow as rapid urbanization and population growth exceed construction capacity. Current estimates suggest Algeria needs to build between 250,000 to 300,000 new housing units annually just to meet basic demand, not including the existing backlog.
Urban areas experience the most acute supply-demand imbalances, with Algiers and Oran showing particularly tight markets. The combination of limited developable land, bureaucratic delays, and financing constraints restricts new construction despite strong buyer demand.
Government analysis indicates that for every new housing unit built, approximately 1.5 to 2 households remain on waiting lists for affordable housing. This ratio demonstrates the magnitude of the supply shortage across the country.
The demand drivers include Algeria's young population, increasing household formation rates, and growing purchasing power in urban centers, all contributing to sustained pressure on the limited housing stock.
How many new housing units are expected to be delivered nationwide in the next 12 to 24 months?
Algeria's government has ambitious housing delivery targets through its national housing programs, particularly the AADL3 initiative.
| Program | Annual Target | 24-Month Delivery | Primary Beneficiaries | Completion Status |
|---|---|---|---|---|
| AADL3 | 400,000 units | 800,000 units | Middle-income families | 60% pre-construction |
| Social Housing | 120,000 units | 240,000 units | Low-income households | 40% under construction |
| Rural Housing | 59,500 units | 119,000 units | Rural communities | 25% completed |
| Total Government | 579,500 units | 1,159,000 units | All income levels | 45% average progress |
| Private Sector | 80,000 units | 160,000 units | Higher-income buyers | 70% market-ready |
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What are the current mortgage interest rates in Algeria, and how do they compare to regional averages?
Mortgage interest rates in Algeria currently average 6.5% for standard 20-year fixed-rate loans as of September 2025.
These rates apply to qualified borrowers with stable employment and adequate down payments, typically requiring 20-30% of the property value upfront. Banks offer slight variations based on borrower profiles, with rates ranging from 6.0% to 7.5% depending on creditworthiness and loan terms.
Compared to regional averages, Algeria's mortgage rates are competitive within the MENA region. Morocco offers similar rates at 6.2-6.8%, while Tunisia ranges from 7.0-8.5%. Egypt's rates are higher at 8-12%, making Algeria relatively attractive for mortgage financing.
However, mortgage accessibility remains limited due to strict lending criteria, documentation requirements, and limited banking infrastructure in rural areas. Most banks require extensive income verification and collateral beyond the property being purchased.
The government is working on mortgage market reforms to improve accessibility and reduce interest rates further, with proposed initiatives targeting 5.5-6.0% rates for first-time homebuyers by 2026.
What percentage of property transactions in Algeria are financed through mortgages versus cash?
Cash transactions dominate Algeria's property market, accounting for approximately 75-80% of all residential sales as of September 2025.
Mortgage-financed purchases represent only 20-25% of total transactions, significantly lower than international standards where 60-80% of properties are typically purchased with financing. This high cash proportion reflects cultural preferences, limited banking penetration, and mortgage accessibility challenges.
In major cities like Algiers and Oran, mortgage usage is slightly higher at 25-30% of transactions, primarily among younger professionals and expatriate communities. However, even in these urban centers, cash purchases remain the dominant transaction method.
The low mortgage penetration stems from several factors: complex documentation requirements, lengthy approval processes, high down payment requirements (typically 25-30%), and limited financial literacy regarding mortgage products among potential buyers.
Government initiatives aim to increase mortgage financing to 40-50% of transactions by 2027 through improved banking infrastructure, simplified approval processes, and first-time buyer incentive programs.
How has rental yield evolved in major cities, and what is the current gross rental yield?
Rental yields in Algeria's major cities have remained relatively stable, offering attractive returns compared to regional markets.
Algiers delivers gross rental yields of 6-8% in central areas, making it one of the highest-yielding markets in North Africa. Premium neighborhoods and well-located apartments consistently achieve yields at the upper end of this range, while suburban properties typically yield 5-6%.
Oran shows competitive yields of 5-7% in prime areas, with an average of approximately 6% across the city. Coastal districts and business centers command the highest rental rates, supporting strong yield performance for property investors.
Constantine and other secondary cities offer yields ranging from 4-6%, with newer developments and centrally located properties performing better than older stock in peripheral areas. The lower purchase prices in these markets can offset the reduced rental rates.
Rental yield evolution over the past three years shows stability rather than growth, as both rental rates and property prices have increased proportionally. This stability provides predictable returns for investors, though capital appreciation has been the primary driver of total returns.
What is the current vacancy rate for residential properties?
Residential vacancy rates in Algeria vary significantly between urban and rural areas, reflecting different demand dynamics across the country.
Urban areas maintain low vacancy rates, with cities like Algiers and Oran showing occupancy rates of 90-95% in desirable neighborhoods. Oran's coastal districts specifically report 93% occupancy, indicating strong rental demand in prime locations.
City centers across major urban areas experience minimal vacancies due to limited supply and strong demand from young professionals, government employees, and growing urban populations. New developments in these areas typically achieve full occupancy within 3-6 months.
Rural areas face significantly higher vacancy rates, often exceeding 15-20%, due to limited economic opportunities, fewer amenities, and ongoing rural-to-urban migration patterns. Many rural properties remain vacant or are used only seasonally by urban families.
The overall national vacancy rate is estimated at 8-12%, with the government's housing programs focused on reducing this figure through targeted development in underserved areas and improved transportation links between urban and rural regions.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Algeria versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How much foreign direct investment has flowed into Algeria's real estate sector in recent years?
Foreign direct investment in Algeria's real estate sector has increased significantly following recent policy reforms and currency adjustments.
The dinar devaluation and relaxed foreign investment regulations have attracted more international capital into residential and commercial real estate projects. FDI flows into real estate have grown from approximately $200 million annually in 2020-2021 to an estimated $450-600 million in 2024-2025.
Major investment sources include Gulf states, particularly UAE and Qatar, along with European investors from France, Spain, and Italy. These investors focus primarily on luxury residential developments, mixed-use projects, and commercial real estate in Algiers and Oran.
Recent annual figures show increasing momentum, with 2024 recording the highest FDI levels in the real estate sector since 2015. Government reforms allowing foreign ownership of residential properties under specific conditions have contributed to this growth.
The trend indicates continued growth in foreign investment, with projections suggesting annual FDI could reach $700-900 million by 2026-2027 if current policy reforms continue and political stability is maintained.
What government housing programs are currently active, and how many households benefit annually?
Algeria operates several major housing programs designed to address the country's housing shortage and affordability challenges.
- AADL3 Program: The largest initiative targeting delivery of 1.4 million homes nationally, with approximately 400,000 units planned annually. This program serves middle-income families and has benefited over 2 million households since inception.
- Social Housing Initiative: Provides subsidized housing for low-income families, delivering approximately 120,000 units annually and serving around 150,000 households per year through direct allocation and rent subsidies.
- Rural Housing Development: Focuses on improving rural housing stock with 59,500 units annually, benefiting approximately 75,000 rural households through construction grants and infrastructure improvements.
- LSP (Location-Sale Program): Offers rent-to-own opportunities for middle-income families, serving approximately 50,000 households annually with gradual ownership transfer over 15-25 year periods.
- First-Time Buyer Support: Provides down payment assistance and favorable loan terms, helping approximately 25,000 first-time buyers annually access mortgage financing for property purchases.
Combined, these programs benefit over 2.5 million households annually through direct housing provision, financial assistance, or related support services, representing a significant government commitment to addressing housing needs.
How many construction permits have been issued in the past year?
Construction permit issuance in Algeria has increased substantially, reflecting the government's push to expand housing supply and infrastructure development.
Nationwide, approximately 180,000-220,000 residential construction permits were issued in the 12 months ending September 2025, representing a 15-20% increase compared to the previous year. This growth aligns with government housing program expansion and increased private sector activity.
Algiers accounts for approximately 25-30% of total permits, with 45,000-55,000 permits issued for residential projects. These include both individual housing units and multi-unit developments, with apartment buildings comprising 60% of permitted construction.
Oran follows with 20,000-25,000 permits, showing strong growth in coastal and suburban areas. Constantine and other secondary cities collectively account for another 40,000-50,000 permits, reflecting expanding development activity beyond the major metropolitan areas.
The trend shows acceleration from 2023-2024, when annual permits averaged 150,000-170,000 nationally. Current projections suggest 2025 will close with over 250,000 permits issued, indicating robust construction pipeline development across the country.
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What is the current inflation rate in Algeria, and how has it impacted construction costs?
Algeria's inflation rate remains elevated as of September 2025, directly impacting construction costs and overall property affordability across the market.
Current inflation runs at approximately 8-10% annually, significantly higher than the government's target of 4-5%. This elevated inflation particularly affects construction materials, labor costs, and land acquisition expenses, creating upward pressure on property prices.
Construction material costs have increased 12-18% over the past 12 months, with imported materials like steel, cement additives, and specialized building components experiencing the steepest price rises. Local materials show more moderate increases of 8-12%, though still exceeding general inflation rates.
Labor costs in the construction sector have risen 10-15% annually, driven by skilled worker shortages and increased demand from multiple large-scale housing programs operating simultaneously. This labor cost inflation directly translates into higher property development costs.
The combined effect of material and labor cost inflation has made property affordability a key government priority, with subsidized housing programs specifically designed to offset these cost increases for lower and middle-income households seeking homeownership.
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Conclusion
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.
Algeria's property market presents both opportunities and challenges for investors and homebuyers. The significant price variations between cities offer different entry points, while ongoing supply shortages support continued demand across all markets.
Government housing programs and infrastructure development indicate long-term commitment to market growth, though inflation and financing limitations require careful consideration for potential property purchases or investments.
Sources
- Average House Prices in Algeria - Sands of Wealth
- Algiers Price Forecasts - Sands of Wealth
- Oran Price Forecasts - Sands of Wealth
- Algeria Property Prices - Global Property Guide
- Algeria Real Estate Market - Statista
- Algeria Property Investment - Numbeo
- Constantine Property Prices - Real Advisor
- Algeria Housing Market Costs - EstimationQS