From 1994 and 2010, Dakar property prices surged by about 256%, according to Senegal National Statistics Agency. Dakar's property market is a favoured investment for regional elites because it is considered as a safe haven in turbulent West Africa. Also, Dakar is a peninsula, “It is widely recognized everywhere in the world that where space is restricted, prices have a tendency to rise,” says M. Thierno Mamadou Kâne of the Notarial office Amadou Moustapha Ndiaye et Aida Diwara Diagne.
Dakar continues to experience double-digit increases in property prices in recent years. The major driver is sharp population growth. Dakar’s increasing population is mainly fuelled by migrants from rural Senegal and neighbouring countries. Currently, the country has about three million people.
High-end property buyers from countries like Nigeria have increasingly seen Dakar, located on a peninsula that is Africa's westernmost point, as a reliable market for second homes, said Robert Tashima of Oxford Business Group.
Moreover, the widespread money laundering in the country is also driving the property market.
Foreigners can own property in Senegal. A note of caution: getting money out of Senegal can be difficult. Officially the Investment Code stipulates free transfer of capital. But in reality transfers to countries other than members of the West African Economic and Monetary Union are still subject to numerous requirements, controls, and authorizations. Also, opening a foreign exchange account requires approval of both the Central Bank and government.
Analysis of Senegal Residential Property Market »
A 250 square metre (sq. m.) apartment in Dakar would cost around US$320,000 to buy (or US$1,280 per sq. m.), and rent for around US$2,000 per month. This gives a yield of 7.5%.
As is usual in urban markets, smaller properties tend to yield rather more, while larger properties yield less.
Beachfront property costs are around the same, but the rentals achievable are higher. A 300 sq. m beachfront property might cost around US$320,000, but could rent for US$2,800 per month, giving a yield of 10.5%
Capital Gains: Capital gains gains realized from the sale of real property are taxed at a flat rate of 30%.
Inheritance: Inheritance tax is levied at different rates, depending on the relationship between the deceased and the heirs. Husbands, wives, and linear descendants are liable to pay 3% tax on their inheritance.
Residents: Residents are subject to income tax on their global income.
The main costs are the stamp duty at 10%, and realtor’s fees which range from 5% to 8%.
Senegalese think in Euro. The currency is the CFA, issued by the Central Bank of West African States and pegged to the Euro at €1=CFA655.957.
Rent: Rents are decide solely by landlords, although in theory, they are fixed, based on the market value of the property.
Tenant Security: If the tenant refuses to leave at expiry of the contract and after thirty days notice, the case may be referred to court. The court is most likely to render judgment within one to three months.
In March 2000, liberal centrist Abdoulaye Wade won the parliamentary elections, resulting in a power-sharing government. He went on to win the 2000 Presidential elections.
The decline of the economy under socialism had led to the emergence of his centrist movement. However when Wade had run for President in 1983 and in 1988, electoral fraud deprived him of victory and he was imprisoned. But after President Abdou Diouf made friendly overtures, Wade joined the government in 1991-2 and 1995-98.
He changed the constitution to reduce the powers of the presidency and to institute a system which is monocameral and effectively parliamentary. He had pushed economic reform, privatization, and a much greater role for the market. The economy recovered thereafter. From a meagre economic growth of 0.66% in 2002, the economy expanded by an average of 6% in 2003-2005.
Wade emerged victorious during the 2007 presidential elections. The economy grew modestly during his term, with an average real GDP growth rate of 3.4% from 2007 to 2011, based on figures from the IMF. However in the 2012 presidential elections, Macky Sall defeated Wade, garnering more than 65% of the popular votes.
The economy was estimated to have grown by 4.5% in 2014, after expanding by 3.5% in 2013 and 3.4% in 2012, according to the IMF.
Inflation is low in Senegal, due to the country’s membership of the Central Bank of West African States (BCEAO). The exchange rate is stable, as the CFA is pegged to the Euro.