Real estate prices in Senegal have been steadily rising in recent years, particularly in Dakar. In fact, rents in the Senegalese capital have increased by 250% since 1994! This has made it increasingly difficult for those on a tight budget to find housing. But the question many are asking is how these prices are determined, and why the variations are so significant from one area to another. This is what we will explore in this article, attempting to provide some answers to this complex issue of real estate prices in Senegal.
REAL ESTATE, A MARKET UNIQUELY
Like all sectors of activity, real estate in Senegal operates within a market . To put it simply, a market consists of supply and demand. Demand involves paying a certain amount to acquire an item or service, which represents the supply.
It's exactly the same for real estate in Senegal. Demand is represented by people looking for housing. Therefore, available properties constitute supply , and individuals can choose from all these options based on their budget, needs, and so on. It's exactly the same for businesses. They are looking for commercial premises to conduct their operations.
SUPPLY AND DEMAND, THE KEY FACTOR
Once we have a good grasp of how a market works, it will be interesting to examine its two components: supply and demand. This will allow us to better understand how these two factors influence real estate prices, particularly in Senegal.
The country has experienced massive population growth. From a population of just 5 million in 1980, it now has 17 million inhabitants. This represents a significant increase in demand! And this is therefore the first factor to consider when trying to understand how real estate prices are determined in Senegal.
The second point to analyze is the existing supply. For a long time, the real estate market in Senegal was unable to keep pace with local demographic growth in terms of the number of homes. This led to a housing crisis, meaning there wasn't enough housing for everyone.
This is precisely why the Senegalese government has implemented the 100,000 Housing Program , in order to counter this phenomenon.
Therefore, the theoretical rule is simple. When there is a lot of supply and little demand, rents increase. Conversely, when there is a lot of supply but little demand, rents decrease.
THE ROLE OF THE REAL ESTATE AGENT IN SENEGAL
When selling a property, the wisest course of action is to entrust its valuation to a real estate agent . Only they will be able to inform you about current property prices. Through their valuation, they will provide you with a snapshot of the average price in the area.
It's essential to remember that a property exists in a specific place and time . Even if a real estate agent can speculate somewhat on the area's potential in the coming years, their valuation will be based solely on past performance. They will examine properties already sold in the area and aim for a price consistent with that information to determine their valuation. If the house next door is exactly the same as yours, the price will inevitably be similar.
Several other factors will come into play: the condition of the property, its amenities, its proximity to shops and conveniences…
So, you now have some initial answers to help you understand real estate prices in Senegal. Of course, many other factors need to be considered to fully grasp the phenomenon, including speculation. We'll have the opportunity to discuss this further in a future article.
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