Somalia’s real estate boom causes financial problems for Mogadishu residents

Mogadishu, Somalia – Mumtaz Ahmed looks and sounds drowned. Three weeks ago, she was looking for an apartment to rent in the Somali capital, Mogadishu, for her young family of three. The few properties on the market are either very expensive or the owners require a large deposit in advance.

“I’m looking for a two- to three-bedroom apartment in this area, and it seems impossible,” a mother told Al Jazeera Island as she sat in the waiting area of ​​a real estate agency in the district’s Waberry neighborhood. City.

“Sometimes, even paying a deposit does not guarantee you the property you want. Mogadishu is not Mogadishu today [a] A few years ago, Mumtaz added as more potential tenants flocked to the small waiting area.

With a budget of $ 350 a month, Excellent does not hold much hope. “Three or four years ago I would have gotten a four-bedroom villa in the most beautiful area of ​​the city for that money,” she said.

Since August 2011, when the al-Qaeda-linked armed group Al-Shabab was expelled from the port city, the Somali capital has enjoyed relative calm. The city horizon is changing rapidly with new multi-storey apartment buildings replacing lead-broken homes.

The sounds of hammers and cement mixers are a common feature of city dwellers. If you look anywhere in Mogadishu, you will see that they are building new apartments. But that did not make it cheaper or more affordable.

With the armed group out of sight and the political reality shaky among the warring elite, people flock back to the city.

Property is snatched up even before it is put on the open market. Some residents even sign multi-year agreements to secure properties in their preferred part of town.

New buildings are being built throughout the Somali capital [Noor Mohamed/Al Jazeera]

Ibar Osman Ibrahim woke up early to tour various real estate agencies in downtown Mogadishu. The 27-year-old electrical engineer hopes to find a suitable villa for rent.

“I’m looking for a perfect four bedroom villa in the Wabiri neighborhood,” Ibar told Al Jazeera. “This area is more expensive than other areas because government officials prefer it. It is safer for them than for many other parts of the city. ”

“I will be very happy if I get something for $ 400 a month. Every month the asking price rises. Our salaries have barely risen, which makes it difficult. ”

The rent does not include utility bills, with the East African country having one of the most expensive electricity prices in the world.

“Those who are lucky enough to get a well-paid job, we spend 60 percent of our salaries on rent and another 20 percent on bills,” he said.

Real estate developers are particularly pleased with the booming market.

Ismail Ali Tohou saw an opportunity in the market two years ago. He now owns and operates Kiro Sheeg real estate agency, with several offices in the city.

“In this office we see at least 50 people looking for rental properties,” a father of three told Al Jazeera. “There is a great demand. Demand prices have risen by more than a third over the past two years, even with the pandemic. ”

For each tenant who finds a property, they charge a fee of $ 100.

“Sometimes people are willing to pay you money just so you can call them if and when a property is on the market. They want to beat the competition. “Going into this business is the best decision I have made,” the 30-year-old said with a smile.

Investments pouring in from the country’s large diaspora have pushed up prices. Rather buy land and build apartments.

From Makkah Al Mukarramah Road, the city’s main street, a group of young men are typing and taking orders by phone in a two – room office full of stylish computers. They work for Bile Home Repair and Construction Services, one of the city’s leading construction companies.

“Most of our customers are diaspora and businessmen,” the company’s CEO Bayel Mahmoud Dahour told Al Jazeera.

“Every month we start our business on at least seven properties. In 2019 we did one, if we are very lucky, there might be two. For most of our clients, it is meant for investment only. “There is now confidence in the market,” Bell, 42, added.

But he said demand could not keep pace with supply.

Anas Gilani says he can no longer afford to live in Mogadishu because it is too expensive [Noor Mohamed/Al Jazeera]

The coronavirus pandemic has also taken a toll on the market, with building material prices soaring. This increase is passed on to the tenants after completion of the property.

“Two years ago, 100 kg of reinforcement bars cost us $ 52. Now it’s $ 92. The cost of a bag of cement 50 kg was $ 6, now it is $ 9.5. Everything is more expensive now. “These costs are passed on through the chain,” Bale added.

With prices skyrocketing, many choose to either move to the outskirts of the city or even neighboring towns, come to Mogadishu in the morning and go home in the evening.

Anas Gilani used to live in Mogadishu but says the city has become unaffordable for him and his family. Move to Afgoye, a town 30 kilometers (18.5 miles) from the city.

“I work as a laborer in construction sites. I used to earn $ 14 a day, but now I earn $ 16. “I can not pay rent, education and food for my family if I go to live in Mogadishu,” a man of two and father of five told Al Jazeera. Only the rich can live in this city. Everyone is either struggling or moving elsewhere. ”

For Mumtaz, the solution is for fewer people to move into the city.

Every Somali wants to live in Mogadishu. Until that changes, I see no change. She said prices would continue to rise.

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