Faouzi Ayadi, promoter and founding director of the website Bourseimmo, whom we met on the sidelines of the 13th edition of the Mediterranean Building Fair (MEDIBAT), gave Africanmanager an exclusive interview in which he denounced the remarkable rise in property prices, calling on the state to fulfill its role and balance the land sector.
What are the characteristics of the property sector in Tunisia?
The real estate sector in Tunisia is characterized by two major factors. First, prices rose across the country without exception but to percentages and degrees that vary from one area to another and from one category to another. Today, there was an increase corresponding to 6% sometimes even 12% in some other areas. Concerning land, prices have increased by at least 15%.
This increase is explained by two factors, high inflation, and the fact that the land sector remains the refuge of investors. Because of lack of profitability of investment in the financial market, people are moving more and more towards the land sector.
The second fact is that construction materials and labor have experienced a remarkable increase.
Add to this the slow administrative procedures since the revolution, whether at the level of permission or that of related services such as connection, Steg, Sonede and ONAS.
These services, today, take more and more time, making the construction cycle exceed three years.
All these data mean that the real estate market has become a bit saturated. The demand is there but the purchasing power is limited and hampered compared to selling prices.
Is it a crisis?
Crisis! No, it is not easy to call such a situation a crisis. We can speak of a slower pace of sales. We can also talk of an offer which can exceed in some way demand.
If we do the mapping, we can find that the demand still exists in certain areas like Aouina, Lake, Ariana, Al Ghazala and El Medina Jadida. These areas are still acceptable in terms of price.
However, all seaside areas have difficulties selling without exception, for two reasons. These areas contain tourist and semi-tourist projects while the tourism sector has been stagnant since the Revolution and demand for Tunisians abroad in terms of real estate is falling.
The governorate of Sfax cultivates a weird feature; prices have inflated the land has tripled while the infrastructure is not viable. The pace of sales in Sfax is currently too much while the price range is around 1500TD / m2. The offer is very large compared to demand. Small and micro projects are everywhere in Sfax. If one can speak of crisis, it is that its beginnings start to appear in Sfax. If demand does not change in a year, we can speak of a crisis.
And what about new projects?
New projects are also down compared to the usual rate. We have identified 350 projects in the course of marketing. However, the number of projects that has at least two years has increased.
Today, at least three years are needed for the project to be completed. And for the sale, we can talk about 4 years. However, the plan sale decreased or even disappeared because of the decrease in equity.
Is the price increase linked to the Revolution?
The certainty is that from the revolution until now, inflation has continued to increase, hence the rise in property prices. Prices have doubled or tripled independently of the infrastructure. In addition, the cost of the workforce has doubled, which increased the cost price of the product.
What solutions to control real estate prices?
In the land sector, the state is called to play its full role as a land provider. The state must be present all over the country to create the balance not to have these prices. The State shall not sell with the same techniques of the private sector, namely the auction and inflated prices.
If the state can not control the land sector, it cannot control other components. The land component should not exceed 18 to 20% of the total project cost as is the case today where it currently reaches 30%.
Moreover, we are building with the same construction techniques which are slow and require repairs. We need other ecological and rapid methods and techniques to compress time and ensure good quality.
Moreover, if we will continue with the same rhythm, the sector will be disconnected from the purchasing power of Tunisians and out of step with reality.