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As you might already know, 2020 was a tough year. It was even tougher on the real estate sector in Cameroon. The COVID-19 pandemic negatively affected the real estate market, triggering an almost 30 per cent slump in its prices and property value.

For clarity, we will start from the basics:

By the end of 2020, Cameroon recorded a population growth rate of 2.59 per cent, a drop against 2.62 per cent of 2019. However, the rate of urbanization increased as many people in search of economic opportunities and security moved to the six major cities; Yaounde, Douala, Bafoussam, Garoua, Bamenda and Nkongsamba, taking the urbanization rate to 56.3 per cent, as against 55.7 per cent in 2019.

However, infrastructural development has not increased rapidly over the years to cater to the rising needs of the newly urbanized and the growing middle class. Thus, housing remains a big challenge for the average Cameroonian and the cost of housing and building materials continuously skyrockets across urban areas and semi-urban areas.

According to Centre for Affordable Housing Finance in Africa (CAHF), the cost of a one-bedroom apartment in the city center is CFA97 333.33 (US$166.6), the cost of one-bedroom outside of the center is CFA55 000 (US$94.1), the cost of three bedrooms in the city center is CFA 308 437.5 (US$527.9), while the cost of three bedrooms outside of the center is CFA170 625 (US$292). At these exorbitant rates, the majority of the people are moving from homeownership to rentals in the cities, with some opting to own a house in the rural areas, usually where they are from.

Over the years, the Cameroonian government has implemented various social housing schemes to curb the ballooning housing problem. Despite these interventions, the housing challenges largely remain unperturbed.

Recently, the government partnered with various foreign bodies and companies to deliver on its promise of ensuring social housing is accessible to every citizen. The project is expected to kick off with 10,000 social homes constructed by the Qatari Haba Business Group, as part of the MOU signed by the Qatari Haba Business Group and the Cameroonian Government. These houses are to be located in a secure and accessible area. The social housing project will see the commencement of 4 500 collective residential apartments in Douala and Yaounde, and an additional, 50 individual housing units will be developed in Kribi, Edea, Dschang, Bangangte, Soa, Limbe, Sangmelima, chief towns of Douala and Yaounde, and other cities.

It is worth noting that to demonstrate the commitment to this social housing scheme, the government handed over house keys to 32 beneficiaries who completed payments to the low-cost residential properties on July 14, 2020

Current Challenges:

The effects of the COVID-19 Pandemic

The real cause for concern is the negative impact of the three per cent drop in the economic growth of Cameroon due to COVID-19. This triggered a decline in revenue in many businesses and as a result, many people lost their jobs and became ineligible to access loans. To remedy their financial situations, most of these people sold houses and landed properties below market value, crashing the real estate market by approximately 30 per cent.

Besides, the decline in the equities market makes it difficult for real estate companies to recover from this crash. Real estate companies caught in this web are now forced to oblige the lower prices to recover some money.

Land regulation policies

The World Bank’s Doing Business Report 2020 ranked Cameroon at 175 out of 190 economies on the ease of registering property. Cameroon has strict policies concerning land use and land ownership. The majority of the land is considered national land, administered by the State for the “public good” and held under customary law. By formal law, the land is classified as private, public or national. Private land is land owned by individuals, groups and corporate entities. Lands under this category must be titled and registered, while, public land includes the waterways, seaside, roads and parks held by the State for the benefit of the citizenry of Cameroon. Unoccupied and informal settings, mostly in the rural areas are held under the under customary law.

The use or rights to national land can be allocated by the State to an individual, individuals or groups, to be converted into State public or private property. The process of converting unregistered land to private land is often long and tedious, which impedes infrastructural development and create conflict surrounding ownership. Only a handful of Cameroonians have obtained land rights. According to MINDAF, only 125 000 title deeds were issued between 1884 and 2008 (approximately 1 000 titles per year on average).

To mitigate this challenge, the government has reduced the length of the procedure involved in reviewing and approving a request to title land.

Also, property tax charged at 0.1 per cent of the assessed property value is payable annually, with or without an ownership certificate or an administrative or judicial order issued on real estate in Cameroon. This property tax does not apply to properties that belong to sporting bodies’, associations, clubs, or accredited properties intended for sports and sports facilities.

To conclude, although the real estate sector took a nosedive in 2020, it still holds great potential for developers of affordable residential housing, rental housing, and luxury apartments as the number of urban settlers continuous to grow. One thing is certain with the increase in demand, new infrastructure has to be built and real estate companies like Diamond Realty are taking up the challenge of building ultra-modern homes across Cameroon.

Find out more about our latest project Aidenville Estate on +237 69 572 3371, +237 68 285 9009 .

*Data used in this blog post was sourced from Centre for Affordable Housing Finance in Africa (CAHF).