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The real estate market in the port city of Nacala in Nampula province experienced a leap forward between 2011 and 2015, with the construction of buildings and rental of apartments stimulated by major projects such as the construction of the local international airport and the Nacala-a-Velha coal terminal.
At the time, the demand for real estate was great, with supply insufficient to accommodate the workers of the companies providing services to the two international projects, many of them from all over the country – and the world.
Property in suburban neighbourhoods appreciated as people invested heavily in real estate. Allied to this, the construction of the airport heralded a promising future for hotels and tourism.
With the completion of the two projects and the deceleration of the country’s and world economies however, the real estate business with its new residential and commercial property, hotels and rental sector, began to face problems.
The rent on a type 3 house in a good neighbourhood, around 120,000 meticais a month in 2011, has fallen to less than 30,000 meticais. A type 2 apartment in the same area rented for about 40,000 meticais per month; today, it is 9,000.
Many completed buildings, and others still unfinished stand empty. The exit of many investors from the Special Economic Zone, has transformed into “white elephants” the apartment blocks built thinking about business then glimpsed.
The crisis in the sector has brought many projects to a halt, with owners waiting for better days to resume work. They are visible across the city, their workers idle. Many of the projects were started by Mozambicans of Lebanese origin who did not want to speak to Noticias.
These citizens came to Nacala-Porto at the height of the boom to sell real estate national and foreign companies settling in the city for the business opportunities associated with the projects then underway.
Our reporter also learned that the current economic and financial crisis has forced some construction companies to suspend work, particularly in the tourism and hotel industry.
Effects of mega projects
According to economist Antoninho António, the current crisis in the Nacala real estate market is due to the effects of the construction of the international airport, the multi-user coal terminal in Nacala-a-Velha and the rehabilitation of the railway transporting coal from Tete.
At the time, he explains, real estate rental prices were artificially high because of the demand for accommodation by qualified technicians, and because the demand for financial resources was greater than the local supply.
“Because these projects brought with them a qualified workforce demanding decent accommodation, when they signed contracts with the companies, they requested accommodation,” explains.
Owners were obliged to refurbish properties, with some borrowing from banks to finance work they have yet to see any return on.
“Currently, prices tend to conform to our reality. There are individuals who have become indebted to the bank to acquire land in Nacala-a-Velha and today do not know what to do with this land. So too some hotels have been built there and have not so far even been opened,” he concludes.
António says better times will return to the real Nacala-Oporto estate sector. Other investment opportunities are lurking there, especially when gas extraction in the Rovuma basin in Cabo Delgado starts.
By Luis NorbertoSource: Noticias