Overview of Real Estate in Somalia
At a ballooning deficit of 2 million housing units, the demand for real estate in Somalia will only continue to grow. In that demand lies an investment opportunity like no other to make great returns and provide value to both Somalis and foreigners looking to call Somali home.
Combined with Somalias continued infrastructural development, a safe business environment and growing international appeal, it is clear that the real estate sector is set to propel the country forward and is an investor’s dream come true.
Before investing in real estate however, it is important to get a good sense of what the real estate market in Somalia is like. This overview of the real estate industry does just that. From real estate developers in Somalia such as Amal Real Estate to the types of houses in Somalia and the major players in Somalia’s real estate, this is a great starting point to help both investors and seekers alike navigate real estate in Somalia .
Somalia’s Real Estate Players
A good starting point for understanding Somalia’s real estate is looking at the major players, and their processes and how they affect the industry. By players, this means real estate agents, property developers (commercial and residential), homeowners and landlords, and tools available for discovery and trade.
Real Estate Agents
Somalia’s real estate sector in many ways is sustained by real estate agents. Developers and landlords rely on them to sell and rent property fast for a fee. Seekers rely on them to find property that matches their tastes and budgets. Listing platforms depend on them to increase the real estate portfolio on their sites. Researchers need them to get a good sense of what people are looking for, how much they’re willing to spend, the most sought after neighbourhoods and finally, agents help determine pricing particularly for homeowners thanks to their extensive knowledge and experience.
There isn’t any officially recognised body for real estate agents in Somalia. Instead, there are two main bodies lobbying for that recognition.
Real Estate Developers in Somalia
Residential estate developers are the best bet for seekers looking to live in well-planned communities complete with good roads, 24/7 security and basic amenities. Developments such as New Garowe by Amal Real Estate Ltd and Kismayo Developments are good examples of this.
Residential developments tend to be gated, have uniform designs and are often in the luxury tier of homes in Somalia. Residential developments also have the best chance of being considered for mortgages because they are well-organised and work with banks and home financiers.
Top Real Estate Developers in Somalia
Some of the leading real estate developers in Somalia, old and new putting up commercial, residential and mixed-use developments are listed below.
Amal Real Estate Limited
Amal Real Estate Ltd is Somalia’s leading real estate developer, offering a variety of properties ranging from affordable apartments to high-end homes. Amal Real Estate Limited offers affordable houses for sale in Somalia built to the highest standards that competitors often sell for more.
Demand for upscale property, a booming real estate market and a friendly market for investors are some of the reasons why Somalia has become a top real estate investment destination.
To that effect, there are different options for investing in real estate in Somalia. They include Buy-to-Let properties, residential and retail property development, REITs, house flipping, buying and selling houses, land flipping,
There are different options for investing in real estate in Somalia. They include Buy-to-Let properties, residential and retail property development, REITs, house flipping, buying and selling houses, land flipping,
As the name suggests, these are properties investors buy and then rent out or lease. These types of properties are usually managed by facility managers who take care of marketing, maintenance and sales. This type of property investment exemplifies the phrase, let your money work for you.
Buying and Selling (House Flipping)
This is straightforward. Investors buy properties at a lower cost, renovate them and resell them at a higher cost to cover for the new upgrades. Renovating houses to increase their value is called flipping. So essentially, investors flip houses to increase their value and make a profit after selling them.
This is very capital intensive and is often reserved for real estate development companies such as Amal Real Estate Limited. With this type of investment, investors research the property market to determine the best areas and what type of houses/communities build. Once this is done, the properties are sold for a profit. It is important that detailed research is done in order not to turn a loss after investing so much into it.
This isn’t limited to just residential developments. Demand for retail spaces like malls and especially leisure and recreational spaces are on the rise.
As the city expands and more people flock into it, it is imperative that new facilities are built to accommodate them. Savvy investors can capitalize on this to develop commercial and recreational spaces that serve the populace and yield significant returns.
The quote, “don’t wait to buy land, buy land” and wait has never rung truer in Somalia than now. As the demand for real estate rises, developers are clamouring for lands in Kismayu’s prime areas.
Challenges Facing Real Estate in Somalia
- Land Acquisition Troubles
- No Proper Regulation
- Cost of Materials
- Unregulated Pricing Schemes