A Guide to Cape Verde Property Investment
The archipelago of Cape Verde is emerging as the “Caribbean” of the North Atlantic. As this tiny island group does so, interest and confidence in Cape Verde property investment is growing dramatically.
With some of the world’s most beautiful beaches, year-round weather that is described as ‘practically perfect’ and a government that welcomes foreign investment, Cape Verde is capturing the attention of investors and vacationers from all over the world. At Nubricks.com we currently give the following 10 reasons as the primary drivers of property market appeal in Cape Verde: -
1. The Stable Government Promotes Property Investor Confidence in Cape Verde
The Republic of Cape Verde has an elected representative government; although still growing as a fairly new independent force, the country has enjoyed political stability for many years and this is helping foster investment and bolster confidence in those who choose to invest in Cape Verde – particularly in both the tourism and real estate markets as the government has given its commitment to support investment into both.
2. A Sustained Economic Upswing is Making Cape Verde’s Property Market Highly Attractive
This small group of islands has experienced very stable, upward economic growth in recent years; the GDP is 1,014 million USD with an annual growth rate of about 6.4% according to the British Foreign and Commonwealth Office. The country’s inflation rate is very low and falls in at less than a 1% with the economy driven by tourism, agriculture, fishing, shipping and now real estate – an investor considering Cape Verde property can immediately see that these solid and sustainable economic foundations are excellent reasons for an investment commitment.
3. Foreign Direct Investment in Cape Verde is Already High Giving a Property Investor Confidence in their Decision
Foreign investment in Cape Verde is high - the Spanish government has invested more than EUR 3 million for example and the World Bank has pledged more than USD 11 million to fund various projects. In the meantime, property investors from all over the world have been pouring their own money into the country, helping develop its economy, property market and tourist trade all at once.
As more money comes from the Cape Verde government to improve infrastructure and develop tourism too, the confidence for potential returns on investments remains high and any investor looking for a little bit of confidence in the market before they commit their own personal funds will clearly find it in Cape Verde!
4. Currency Exchange Rate is Very Promising for Property Investors in Cape Verde
The exchange rate of the Cape Verde escudo to the British pound is very attractive - with a single pound equating to more than 100 escudos, British investors find their money spends very well in Cape Verde making it an attractive choice for British holidaymakers for example.
The cost of living and investing in Cape Verde is also attractive to investors with prices across the archipelago some of the best in the world as far as tropical property investment markets are concerned.
5. Improving Accessibility Making Cape Verde a Faster, more Affordable Getaway and a Better Property Prospect
Cape Verde’s beautiful warm waters, white sandy beaches, palm fringed shoreline and tropical climate might lead many a Briton or European to believe Cape Verde is a world away, but it’s not. With direct flights now running between the UK and Cape Verde and travel time less than six hours, getting to the islands is very easy - and as more infrastructure improvement projects come to completion, getting to and around Cape Verde is becoming even more of a breeze – naturally enough the easier and more affordable the location becomes, so it becomes more appealing for tourists and second home hunters – both groups a property investor will be targeting with their Cape Verdean real estate assets.
6. Growing Tourism Industry Supports Investments in Property in Cape Verde
There are no two ways about it - tourism is the biggest factor driving investment in Cape Verde property forward. As more vacationers discover this paradise, the numbers of trips here are steadily on the rise. Cape Verde’s tourist authority estimates more than 100,000 tourists visit each year right currently but that figure is expected to climb to a half million by 2015. Government support of the tourism industry is also boosting confidence in investments in real estate in Cape Verde. The National Development Plan calls for improving everything from health care facilities and baking to roads, communications and sanitation to draw more visitors and also to retain second home buyers, expatriates and even retirees. This is all excellent news for a property investor.
7. Cape Verde’s Climate is Perfect for Year Round Tourism Appeal Expanding Potential Property Rental Yields for Investors
Cape Verde’s practically perfect year-round weather is a factor driving this country to become the next Caribbean or Canary Islands destination for British and European holidaymakers. With a dry tropical climate that boasts low humidity, average temperatures run from 23 degrees centigrade in the winter to about 29 in the summer. The rainy season here is very short and takes place in the autumn months and so as you can see, there is year round potential for tourism traffic which makes Cape Verde one of the closest locations to the UK and Europe where investors can achieve higher rental yields when targeting the jet to let market because they can expect year round demand.
8. Property in Cape Verde Offers an Investor Massive Short, Medium and Long Term Potential to Profit
An investor who chooses Cape Verde for a property purchase is buying in at the cutting edge of this market’s emergence.
Whilst many of the risks associated with buying in an emerging market are not apparent in Cape Verde, the associated rewards certainly are. Starting prices for Cape Verdean real estate are almost ridiculously low and yet they are rising sharply supported by rapidly advancing international demand. What’s more, the market is based on a developing tourism economy – and now that short, direct and cheap flights are available to Cape Verde from the UK and Europe there is actually nothing to stop the rise and rise in the fortunes of Cape Verde.
An investor who buys in today has the potential to profit in the short term if they buy off plan and flip their property, they can profit over the medium term in terms of increasing rental income from the tourism market, and if they are of a mind to do so, they can buy prime position, front line, beach front accommodation today that in the long term will return them substantial capital appreciation. Cape Verde is therefore an exceptional emerging market choice for investors wanting maximum profitability potential.
9. Low Taxes Make Investment in Property in Cape Verde Pay Dividends
Cape Verde’s government is wholly embracing the idea that foreign investors will bring prosperity to the Republic, and to this end the government has created a solid tax package that is very attractive to property investors.
Unlike other investment hotspots where double-digit income and capital gains taxes are not uncommon, Cape Verde’s capital gains tax is just 3% and this only kicks in when increased land value goes beyond 100% per plot or 30% per piece of real property. The welcoming of foreign investment into real estate in Cape Verde is therefore more than apparent and it certainly gives potential investors such a sense of confidence in the long term appeal of the market.
10. Unique Culture and Geography Makes Cape Verde Stand Out Above Other Potential Property Investment or Vacation Hotspots
The archipelago of Cape Verde is renowned for its beautiful beaches, pristine waters and rising, rolling hills as well as for exotic animals and birds, many of which are endangered. The culture found within Cape Verde is an interesting mix of African and Portuguese with some Italian influence as well and the resulting Creole flavour gives the island a vibrant feel.
The official language is Portuguese, but many locals speak various dialects, Spanish, Italian and even English, and the international flavours and cultural influences make it easy for almost anyone to feel at home in Cape Verde.
Cape Verde is coming into its own as a vacation paradise. As more tourists and expatriates uncover this country’s secrets, the property market is booming with foreign investment potential.
