The year 2024 is shaping up to be a pivotal year for the Tunisian real estate market, which will have to face several challenges and opportunities. What are the main trends that will shape this sector in transition? Here is our analysis and outlook.
The 19% VAT on sales of residential properties postponed to 2025
From January 1, 2025, sales of residential properties will be subject to 19% VAT, in accordance with the 2024 finance law. This measure aims to increase state tax revenues and reduce the budget deficit, but it will also have an impact on the real estate market.
Indeed, this tax will increase the acquisition cost of new housing and could discourage potential buyers, particularly first-time buyers and the middle class. The year 2024 will likely be marked by a buying frenzy toward the end of the year, while early 2025 could see a temporary slowdown before the market finds its balance under the new 19% VAT rate.
For real estate developers, this tax represents both an opportunity and a risk: current housing stock may decrease in 2024 but could rise in 2025, which might push them to lower prices or offer payment facilities to buyers.
According to the land guide of Entreprises Magazine, the land market in Tunisia experienced strong growth in 2023, with a 15% increase in the number of transactions and a 20% increase in the average price per square meter. This trend is expected to continue in 2024, driven by demand from individuals and investors.
This trend can be explained by several factors, including rising construction costs, slow project execution, the complexity of land acquisition due to title issues, the scarcity of serviced plots for construction resulting from demographic and urban growth, as well as considerations related to infrastructure and land viability.
The most sought-after plots are those located in peri-urban areas or coastal regions, which offer a pleasant living environment and potential profitability. Agricultural land is also in demand, particularly for the development of ecological or tourism projects.
The rise of eco-responsible construction
Facing environmental and energy challenges, the construction sector in Tunisia is increasingly turning to eco-responsible practices that aim to reduce the impact of buildings on nature and optimize their performance. These practices include material choices, bioclimatic design, thermal insulation, water management, the use of renewable energy, and more.
Several innovative real estate projects have emerged in Tunisia that integrate these sustainability principles, such as the Smart City project in Tunis, which aims to create a smart and green city, or the Ecovillage project in Bizerte, which offers ecological and autonomous housing. These projects reflect the desire of developers and buyers to engage in a citizen-centered and environmentally respectful approach.
In conclusion, the Tunisian real estate market in 2024 will be marked by important changes that will influence the behavior of sector stakeholders. It will therefore be necessary to adapt to these new realities and seize the opportunities that arise, while taking into account clients’ needs and expectations.