In recent years, several cities across Africa have experienced a surge in property prices, reshaping the urban landscape and posing challenges for both residents and policymakers.
While rising property values may signal economic growth and development, the consequences of high property prices in African cities are multifaceted and extend beyond the real estate market.
As a result, when investing in real estate, it is paramount that you have a clue about the property price index in relation to the region.
The Property Price Index (PPI) is a crucial economic indicator that reflects the overall trend in real estate values within a specific region over time.
Investors, policymakers, and individuals alike closely monitor PPI as it provides valuable insights into the health and stability of the real estate market.
Numbeo, a platform that typically details the differences in the standard of living across the globe closely monitors the property prices of numerous regions, including in Africa.
The platform indexes change periodically as reflected in the difference between the property price index for September, which lists Douala as the most expensive city for real estate, and the list below which shows Kampala as the most expensive city for real estate in November.
With that said, below are the top 10 African cities with the most expensive real estate currently, which is based on a price-to-income ratio.
Methodology
The values in the list are reflective of Numbeo’s price-to-income ratio. The price-to-income ratio is a fundamental measure for apartment purchase affordability, where a lower ratio indicates better affordability. It is typically calculated as the ratio of median apartment prices to median familial disposable income, expressed as years of income (although variations are used elsewhere).
Numbeo’s formula assumes and uses: net disposable family income, as defined as 1.5 * the average net salary (50% is the accepted percentage of women in the workforce) median apartment size is 90 square meters price per square meter (the formula uses) is the average price of square meter in the city center and outside of the city center.
| Rank | City | Country | Price-to-income ratio | Global rank |
|---|---|---|---|---|
| 1. | Kampala | Uganda | 79.4 | 1st |
| 2. | Douala | Cameroon | 47.1 | 3rd |
| 3. | Addis Ababa | Ethiopia | 40.2 | 5th |
| 4. | Algiers | Algeria | 25.9 | 27th |
| 5. | Oran | Algeria | 19.9 | 40th |
| 6. | Rabat | Morocco | 19.6 | 44th |
| 7. | Alexandria | Egypt | 17.1 | 63rd |
| 8. | Tunis | Tunisia | 15.0 | 94th |
| 9. | Casablanca | Morocco | 14.9 | 97th |
| 10. | Marrakech | Morocco | 13.7 | 127th |
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