Cape Verde Property Watch Out Another Hyped Destination!

Have you been tempted to invest in Cape Verde property?

You certainly aren’t alone as many people are purchasing property in this former Portuguese colony located off the West coast of Africa.

These 10 islands are within a one-hour flight from the Canary Islands and they’re being promoted as the “new Canary Islands”. In fact, this area was touted as one of the top 20 foreign property investments during 2005 which led to an increase in UK investors.

Sounds like a great investment, right?

Well, read on…

Many real estate agents are busy convincing investors to purchase Cape Verde property. They hype the huge growth potential for tourism, the 70% increase in property prices in the next 2 years and the new international airport on the island of Sal. They also discuss the proximity of these tropical islands to Europe and the low cost of living with no VAT. They even claim that Cape Verde was voted the second-best investment location worldwide.

It sounds even better, doesn’t it?

Well, I’m going to tell you the real facts. The ones the real estate agents DON’T want you to know.

The Cape Verde islands are very poor in natural resources and they often suffer droughts. Residents often have to rely on international aid for receiving food, and severe droughts have caused many deaths and heavy emigration.

Cape Verde no longer has salt-mining or shipbuilding industries, so it must rely on tourism. Santiago is the largest island, and it contains almost half of the total population of the islands. Unfortunately, the beaches are terrible and Praia, the capital, is dirty and poor.

Tourists are attracted to the quiet island of Maio which is closest to Santiago. The area contains a relaxing atmosphere.

Sal is the main tourist island. Although it’s quite barren, it contains beautiful white beaches and many restaurants and bars. Boavista is closest to the West African coast, and the development is almost 5 years behind Sal’s.

I personally visited the Cape Verde islands and discovered the following:

  • Overdevelopment which affects capital growth
  • Six-hour flight from London – much further than other property hotspots
  • Poor communications
  • Little infrastructure
  • No local resale market
  • High interest rates & difficult to obtain mortgages
  • No opportunity to join the EU since the islands are in Africa
  • Sales prompted by get-rich-quick schemes, not actual demand

Given the true facts, I recommend investing in Scotland or some of the Eastern European countries instead of Cape Verde property.

To find valuable information about other potential investment areas, visit my website.