The increase in the VAT rate imposed on the purchase of real estate has led to a sharp drop in housing sales, according to treasurer of the National Chamber of Real Estate Developers and president of the Sousse regional chamber, Hachemi Meliani.
In an interview with Mosaïque FM, Meliani stressed that the right to decent housing is a constitutional right, adding that the application of a 13% VAT rate on property acquisitions since 2018 has led to a 55% drop in housing sales.
He said that in 2010, the construction of a two-room house in medium-sized areas cost around 110,000 dinars and was sold for 140,000 dinars.
Today, the same house costs 240,000 dinars to build and is sold for 400,000 dinars, due to a significant increase in VAT rates,” he said.
Meliani suggested reducing VAT on property purchases to 7% and reintroducing the hire-purchase contract, which allows the tenant to become the owner after 20 years.
It should be noted that the Finance Bill for 2025 proposes to increase the VAT rate on property purchases from 13% to 19%.
Average flat prices rises in 2023
The average price of a flat in Tunisia rose by 9% in 2023 compared with 2022, according to a retrospective study on ‘Real estate trends in Tunisia: Annual Review 2023 and Outlook 2024’.
According to this study, which is based on data collected by Mubawab between January and December 2023, 53% of the demand recorded via the advertisements published on mubawab.tn concerns purchases, of which 54% are for flats, compared with 15% for villas, 13% for land and 2% for offices.
In terms of flats, the sizes sought vary mainly between two ranges [100 m²-130 m²] and [130 m²-170 m²]. These sizes correspond to S+2 and S+3 flats, which top the list of supply and demand, followed by S+1 flats, reflecting a growing preference for practical, compact layouts.
On the rental side, the average rental price of apartments in Tunisia has also increased by 11% in 2023 compared to 2022. The most popular size on the Tunisian rental market is between 100m² and 130m², accounting for 36% of demand.
In terms of configuration, S+2 flats top the demand list (41%). This trend is also reflected on the supply side, with 39% of listings offering S+2 flats.
In terms of commercial properties, the average price per square meter of office space offered for rent in Tunisia increased by 15% in 2023 compared to the same period in 2022.
Demand for residential land in 2023 fell slightly compared to the previous year. Jardins de Carthage stands out as the most expensive plot for sale, with an average price of 2,800 DT/sqm, suggesting a high-end property market in this location. The next most expensive plots are those in El Menzah 9 (1250 DT/sqm) and Jardins d’El Menzah 2 (1100 DT/sqm).
Other areas such as Chotrana (1000 DT/sqm), La Soukra (1000 DT/sqm) and Riadh Al Andalous (990 DT/sqm) are more expensive but relatively more affordable.
