Gabon starts spending big on affordable real estate

According to a report published by the French Ministry of Finance in 2014, more than 75% of the urban population in Gabon currently live without a land title in dwellings with limited access to basic services. With continued urban growth at an average rate of around 30,000 new city residents per year, the gap between housing supply and demand remains substantial. Estimates for the combined housing deficit in Libreville and Port-Gentil, the country’s two largest cities, range from 50,000 to 170,000 units. This means that although the local real estate market is feeling the effects of the decline in international oil prices and a concomitant dip in liquidity in the short term, prospects in the longer term are solid given the underlying demand, and conditions are likely to improve in the next few years.

Challenges to Development

A number of challenges have prevented affordable housing projects from reaching completion. Delays in building access roads and providing utility connections have even set some projects back, particularly in the Angondjé neighbourhood in the northern end of Libreville, a key location for housing development identified by the Ministry of Housing. Affordability is another key issue as some housing developments that have been built remain too costly for low-income earners. Social housing units start at CFA20m (€30,000), while the monthly minimum wage in Gabon is CFA150,000 (€225). High costs of imported building materials and wages for construction workers contribute to the challenge of keeping housing developments in Libreville affordable. This also presents challenges for developers that grapple with maintaining margins in affordable housing, which is often difficult.

Government Initiatives

Despite the challenges involved in developing affordable housing, reducing the shortage is a major government priority. The Société Nationale des Logements Sociaux (SNLS) was created in 2013 to promote home ownership in Gabon by providing affordable units. The SNLS is building 2000 three-bedroom villas in Bikélé, in the commune of Ntoum, and another 500 villas in Port-Gentil, with per unit costs ranging from CFA23m (€34,500) to CFA42m (€63,000). The housing developments were financed through a partnership between the SNLS, the Union Gabonaise de Banque and Banque Internationale pour le Commerce et l’Industrie du Gabon, which offer subsidised home loans.

In December 2014 the SNLS announced the sale of an additional 872 social housing units built by Turkey-based firm Dorce Prefabricated Buildings and Construction Industry Trade. The prefabricated units, located in Angondjé, are available for rent to those who earn less than CFA150,000 (€225) per month at a monthly fee of CFA35,000 (€52), while those with a monthly income of up to CFA300,000 (€450) can participate in a rent-to-own programme for a monthly fee of CFA55,000-75,000 (€82-112) for over 12 years. Three-bedroom houses for those earning more than CFA600,000 (€900) per month cost between CFA180,000 (€270) and CFA190,000 (€285) per month over 12 years. These units are part of the Alhambra project, which includes an additional 854 apartments to be completed by early 2016. Another SNLS programme is expected to see the construction of an additional 3000 units of affordable housing.