The real estate market in Tunisia is undoubtedly a volatile sector. That is why we ask whether we are heading toward a real estate crisis with declining apartment sales, given the difficult economic context for buyers and the complex situation for developers who are struggling to sell their inventory of new properties. Inflation and rising prices for real estate have affected sales over the past two years.
“The volume of transactions in the 4th quarter of 2021 continued its downward trend observed since the 2nd quarter, recording a decline of 6.9% versus 7.6% the previous quarter. This drop in sales mainly comes from a slowdown in land transactions with a rate of -8.5%, and to a lesser extent apartments with a rate of -1.6%; transactions for houses remained stable. (INSEE).”
However, we observe a decline in the supply of rental properties, which risks creating a real housing crisis in Tunisia (especially in Greater Tunis) and thereby affecting household rental budgets.
Both first-time buyers and real estate investors are asking serious questions about the opportunity to buy apartments and about the rental yield of this type of investment.
A key inflection point will determine investment choices in real estate: the ratio of borrowing cost to rental yield (as is currently the case in several countries where rental prices cover loan repayments).
It is time for public authorities to recognize this problem and propose solutions (notably regarding credit rates for buyers) to make the real estate market more fluid and facilitate the sale and purchase of property before a full-blown housing crisis hits.