Mauritius set for a real estate construction boom that centres on quality
A new property development on Mauritius aims to attract both residents and overseas purchasers at a time when demand for high quality homes on the island from both types of buyers is rising.
Recent reports published by African Economic Outlook state that the residential property market in Mauritius reflects the island’s ability to withstand the current tough global financial conditions.
This is strongly supported by IOREC, the development company responsible for the largest project on the north east coast of the island, Azuri, which says there is a continuing high demand for homes and for foreign investors there are potential tax benefits.
According to government estimates, the real estate sector in Mauritius will be the biggest driver of growth in 2013, providing large scale employment and contributing significantly to its GDP.
The planned construction boom, coupled with Mauritius’ political stability, a booming luxury tourism market and sound infrastructure make the island a highly popular real estate investment destination.
Increasing numbers of the famous sugar estates on the island are turning some of their agricultural land into shopping malls or residential developments for foreigners willing to spend $500,000 or more on a property.
‘What really sets Mauritius apart from other Indian Ocean islands is that it is far more developed and luxury freehold properties under the Integrated Resort Scheme (IRS) in Mauritius are available at far lower price points than in other areas such as the Maldives where properties of a similar standard would cost around $2 million,’ said Murray Adair, chief executive officer of IOREC.
‘Azuri is a new and different model to the previous IRS projects on the island. The key to the project’s ethos is the inclusion of everyone; residents, locals and tourists and this is partially the reason behind the sales success so far,’ he explained.
‘For the first time in Mauritius we will be blending residences for both Mauritian and foreign owners to live side by side. Moreover, the development will include the islands first international school which will allow families to live here long term and provide a good education for their children,’ he added.
Under the IRS there are no restrictions regarding the acquisition of residential real estate by foreigners, making it simpler for foreign investors from the UK, France, Singapore, South Africa, United Arab Emirates and other countries to inject money into new projects on the island such as Azuri. Mauritius is increasingly becoming home to foreign high net worth individuals looking for alternative places of residence and professionals from abroad working in the high end business sectors.
Rhoy Ramlackhan, director at The Property Annex, a Mauritius based property development services company, said that the island continues to be most popular among the French, who want to diversify their investments outside of France and avoid the onerous tax levels imposed by the new French government.
South Africans make up the second largest community of buyers and they are looking for access to a stable off shore property market as a result of the political situation in their country. ‘In relation to the rest of Africa, Mauritius is extremely stable and buyers want the security of knowing that their money is safe,’ said Ramlackhan.
He added that the majority of buyers look for prime beachfront locations on the North Eastern and South Western coasts of the island where they can reside all year round as lifestyle is also important for buyers.
‘Before 2009, buyers wanted capital growth and wealth preservation when investing in Mauritius, as well as the knowledge that their money is in a stable country. At the present time, when capital growth is ever more uncertain, the lifestyle and investment elements have become more crucial. Foreigners want to enjoy a range of activities and leisure facilities with the knowledge that they will easily be able to rent out their property and make steady returns on it,’ he explained.
Although buyers prefer to buy properties on resale, they are willing to buy off plan if the location is prime and the quality of build is high, he has found. As a result, Mauritius is likely to see many more high quality real estate projects being completed over the next two years such as Azuri.
Azuri is the only IRS scheme with a price range from US$500,000 to US$825,000 in Mauritius. The average price on the island for IRS is US$1.6 million. Through the IRS, introduced by the Government in 2002, international buyers and their dependent family can become Mauritian residents once they acquire a property on the island, within designated developments, allowing them to also benefit from a 15% flat tax rate in Mauritius.