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Investing in Cape Verde "a gamble"

13th December 2006 | back to article listings BACK    print this article PRINT

The Cape Verde islands off the West Coast of Africa have been much touted as the natural successor to Spain's thriving property market, but an international investment specialist said today that buying a dream home in the mid-Atlantic is "a bit of a gamble".

Property on the islands can be bought for as little as £25,000 but homes in top of the range resorts will set investors back up to £1 million.

These prices are a snatch when compared to current valuations in Spain, but the islands are still far from attracting the numbers of tourists that would secure stable rental incomes.

Nevertheless, Cape Verde developers are aiming to pitch their properties at UK 'jet-to-let' investors who are, as many surveys have recently claimed, more ambitious about investing abroad than ever before.

Kate Hamilton, spokesperson for Homes Overseas, said that while there is potential in the African islets, investors should not be swayed by the promise of high yields and stable returns.

"They are a bit of a gamble because they are so new on the property radar, five years ago no one had heard of these islands," she said.

"Now all of a sudden everyone is expecting millions out of them and it is a bit ambitious. What we would say is it is a good investment if you have the money to lose. It might be worth a gamble."

Ms Hamilton added that development on the islands is imperative if they are to become tourist hotspots and thus secure strong rental income for jet-to-let investors.

"It all depends on how much investment the area gets and when and how the direct flights will be available," she explained.

"[Flights] are promised for next year, because without the direct flight it takes 23 hours to get to the islands. If the direct flights do not materialise then Cape Verde will not take off if you will forgive the pun."

After its independence in 1975, the former Portuguese colony was ruled by Aristide, who did not allow other parties to compete in elections. Due to international pressure however, in 1990 the country was opened to political pluralism.

Since then Cape Verde has enjoyed better relations with the international community and enjoyed a slow but stable level of development, but still has a long way to go before it can compete with the major European tourist economies of Spain and Portugal.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/3163.html. Alternatively, please see our full press release archive.

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