The crazy market; An attempt to understand real estate …
The real estate market in Sudan is experiencing a significant drop in prices. In contrast, rental prices are increasing at an unprecedented level, which gives insight into how the local market works.
AlTaghyeer: Elfadil Ibrahim
The real estate market in Sudan is in major stagnation after a long period of record price increases.
Real estate prices have fallen 40% according to brokers and dealers who spoke with AlTaghyeer, attributing this to a variety of reasons including a large supply and lack of purchase.
Conversely, rents in Sudan recorded high price increases amid expectations of a 30% increase in 2022.
Despite significant declines in real estate buying and selling prices, experts and specialists indicate that prices are still relatively high compared to the level of income per capita, and compared to rents in neighboring countries, the region , even the world.
Osman Jamil, owner of a real estate store, explains that prices vary from region to region, and that building type, construction and location are all factors to consider.
According to Jamil, houses in the part of Omdurman known as “Old Omdurman” cost between Â£ 115 million and Â£ 130 million. Now, however, their price has dropped to between Â£ 90million and Â£ 100million.
âAs for the prices of plots for subdivisions, we can see that the east of the Nile is the most active in terms of rentals, especially in the districts of Al-Huda Al-Nile, Al-Qadisiyah, Al-Manshiyya East, Al-Nasr, Al-Fateh, Al-Lu’Lu’a, Al-Nakhil, Al Jawhara, Al Naseem Al Talal, Al-Wadi Al-Akhdar, The old Hajj Youssef, in addition to all the squares of Hajj Youssef) at a rate of 8-11-13 million pounds.
According to Jamil, the price of plots in Al-Fayhaa is (40-45) million, down from its previous price of 50 million.
Jamil explains that there are big price differences from region to region. It refers to land in the upscale Kafoury district, Square 9, with an area of ââ425 square meters, and 85 million required instead of the earlier price of 100 million earlier.
He mentioned that transactions in most high-end areas in Sudan are mostly done in dollars, in areas such as Al-Manshiyya, Al-Taif, Kafoury, and Al-Maamoura.
Ibrahim al-Fateh, a broker, noted that apartment prices in Cairo and Turkey are significantly lower than in Khartoum.
The broker pointed out that the price of an apartment in Egypt hovers between 10 and 20 million Sudanese pounds, all services included, while the same amount would not be enough for a land in a suitable location in Khartoum, let alone a apartment.
Al-Fateh emphasizes that there is no obstacle for Sudanese to own real estate in Turkey, as they have the right to buy all types of real estate there in all its categories – apartments, villas and real estate. commercial – in accordance with a tax sale that does not exceed 4%.
âYou can even buy in installments for prices starting at $ 25,000, which equates to around 11 million Sudanese pounds. “
He revealed that many Sudanese citizens recently sold their homes and chose to migrate to Egypt and Turkey, mainly driven by security unrest, declining economic conditions and the lack and weakness of services that followed the December 2018 revolution.
Collapse and migrations
Economics researcher Abdul Latif Ahmed attributed the reasons for the drop in prices for apartments, land and houses to a large supply, lack of demand and the relative stability of the dollar compared to what was happening before.
He told AlTaghyeer that many Sudanese are looking to sell their homes and buy abroad in Egypt and Turkey, thus helping to increase supply and decrease demand.
The economics researcher revealed that very large capital had fled from Sudan and that these funds were intended for trading in real estate, cars, gold and currencies.
Among the many factors affecting current house prices is the current economic crisis in the country.
Ahmed said AlTaghyeer as the collapse and instability of the Sudanese currency causes the citizens to save their money in fixed assets, and hence most Sudanese prefer to keep their money in real estate.
âSometimes you don’t win much, but you won’t lose in the end. “
Behaviors of a bygone era
The economist says that the more supply decreases and the more demand increases, the more prices rise, and the trend of hoarding and monopolizing plots of land has increased in recent decades.
He revealed that there can be one person who has the monopoly on dozens of land and apartments as a kind of escape from a real investment in productive sectors for the risks that exist there, thus transforming the whole capital “for the benefit of parasitic parasites”. brokers only.
The monopoly on land and apartments – according to Abdul Latif – comes from a certain group and certain people who either leave them empty without renting them or allocate them to expatriates, strongly affecting market prices and raising rental prices. .
The economist pointed out that this behavior emerged during the days of a bygone era – the regime of ousted Omar al-Bashir – and that there were big names in politics who traded land, built houses and bought land and farms for millions of people. books and monopolizes them for trade.
Abdul Latif said that these people âhave ruined the economic situation of the country. They haven’t let the market mechanism determine the price of the dollar, gold, land, and housing, and brokers have drifted with them because they want their personal advantage.
According to Abdul Latif, plots of land have become a commodity to be bought and sold, and monopolized in the long and short term, and the issue has been exacerbated by the lack of infrastructure in states and other cities, which made Khartoum the destination for all state residents to obtain services, starting with treatment, studies, universities, employment opportunities, etc.
Khartoum now has a population of almost nine million, which has increased the demand for real estate.
âIt is unfortunate that the real estate market has become a competition of another kind; prestige. Certain districts of Khartoum have become a place of social ostentation, distinguished, even if the services provided are sometimes the same.
Kinan Awad, an intermediary, explained that the price of houses in southern Khartoum in the neighborhoods of Al-Azhari, Andalusia, and Al-Salama vary between 35 and 45 million pounds for ordinary houses, and the number increases if the building is of the load-bearing, columned, larger area or apartment type.
He said AlTaghyeer that areas south of Khartoum, especially the aforementioned three, were not much affected by the decline due to their prices not being high in the first place.
Regarding rental prices, Kinan stressed that they were not at all affected by economic conditions and the recession in the market for the sale of apartments, houses and land.
The intermediary explained that rents increase according to the market situation, and have currently reached astronomical figures, and asserted that in some regions, transactions are made only in dollars.
Kinan predicted that the year 2022 would see the biggest increase in rental prices, as most apartment and house owners rented at prices they considered very low and, trying to keep up with the pace of the market, they hope to put in place appropriate prices until 2023.
Ayman Abdo, the owner of a real estate agency, says the price per square meter in “Square 5” in Kafoury is between 100 and 130,000 pounds, while the price per square meter in Square 9 is between 300 and $ 500, and the price for a one-story prefabricated house is $ 230,000.
The price for a 300-meter plot – which is classified as third degree in some neighborhoods – ranges between Â£ 20 million and Â£ 25million, and a one-story prefabricated house ranges from Â£ 30 million to 33million, depending on the area. and characteristics.
The owner of one of the agencies confirmed that the price per square meter in areas of Al-Mamoura east of Sixty Street in Khartoum ranges between 130 and 150,000 pounds, within 300 meters of 84 square.
The price per square meter in Riyadh of Khartoum varies between 900 and 1200 dollars, and in Arkawit between 180 and 200 thousand pounds, and a one-storey prefabricated house in an area of ââ400 meters is between 280 and 300 thousand dollars.
Economist Muhammad al-Nayer says real estate in Sudan falls under the service sector, due to the national GDP originally composed of three sectors: industrial, agricultural and services.
Al-Nayer pointed out that real estate affects the overall economy in terms of building and construction.
He said real estate was also affected by previously issued Central Bank of Sudan rulings to prevent banks from financing real estate for the benefit of agricultural finance, knowing that the real estate sector is not primarily and solely dependent on banks for its funding.
The economist added that the economic crisis that hit the country has led most Sudanese to deal with real estate as a means of storing money.
“The citizen freezes his money by buying real estate, so this money is not injected into the economic wheel and remains frozen,” he said.
The real estate freeze process leads to speculation, after which the citizen buys four or five lots for sale after prices have doubled.