Market in Depth

Foreign demand fuelling housing market boom in Mauritius

Lalaine C. Delmendo | December 01, 2019

Mauritius (population 1.3 million) is a small island nation in the Indian Ocean, east of Madagascar and mainland Africa.  It has a thriving property market, several years after the government decided to open up the island to wealthy foreign homebuyers.

“Residential real estate has never been so booming in Mauritius as at present,” says LexpressProperty.com.

Foreigners have been attracted to the island because of its beautiful scenery and pristine beaches. Moreover, Mauritius offers great tax benefits to foreigners, a good educational system, a low crime rate and a well-developed healthcare system.  There are currently about 15,000 to 25,000 expatriates living in Mauritius, according to Gervel.

It has one of the strongest economies and one of the most stable democracies in Africa, and one of the highest standards of living in Africa, with a GDP per capita of US$11,228 in 2018, according to the International Monetary Fund (IMF).

Residential property prices soared by about 133% in 2018 as compared to 2010 levels, amidst continued strong demand from both local and foreign homebuyers.

Next to the French, the second largest number of foreign investors in Mauritius are now South Africans. In 2018, South Africans accounted for 25% of property sales to foreigners, up from just 14% in 2015.

“Mauritius is fast becoming a second home for South Africans and with the recent changes in the Mauritian government's property investment legislation, it is now a lot easier to invest in residential and commercial property on the island and there is an increased amount of developments available for SA buyers to invest in, both residential and commercial,” said Theo Pietersen of Seeff Mauritius.

About 280 South African millionaires – those with investable assets of more than US$1 million – have moved to Mauritius since 2007, according to market research firm New World Wealth.

In 2015 the government created the Property Development Scheme (PDS), allowing foreigners to buy villas, with a uniform transfer duty of 5%, thus merging two earlier incentive schemes. Similar to the earlier schemes, known by their acronyms as RES and IRS schemes, a foreign investor is eligible for a permanent residence permit upon buying a property worth at least US$500,000.

Other foreign investment schemes introduced in recent years include the Integrated Hotel Scheme (IHS) in 2012; the Smart City Scheme (SCS) in 2015; and the Ground Plus Two (G+2) scheme in 2016.

In 2018, the median price of a residence in Mauritius stood at MUR 6.5 million (US$177,375), according to LexpressProperty.com. However the median price of properties under the incentive schemes catering to foreigners was MUR 2o million (US$545,800).

Mauritius average price residential properties
Properties worth less than MUR 26 million (US$709,500) represent about 70% to 75% of total demand, while properties with a price tag over MUR 37 million (US$1 million) account for the remaining 20% to 25%, according to Mikael Le Luron of ENL Property.

The country's strong economic fundamentals are a plus. The economy grew by 3.8% in 2018, at par with the annual average growth of 3.7% from 2009 to 2017, according to the Bank of Mauritius. Economic growth is projected at 3.7% this year and 3.8% in 2020, based on IMF estimates.


Analysis of Mauritius Residential Property Market »

Rental Yields

Yields are moderate at 6.17% in Mauritius

Mauritius exchange rate graphProperty prices are around US$700 to US$850 per sq. m. A 100-square meter (sq. m.) property in Port Louis can be bought for around US$85,000. A 500 sq. m. property would cost around US$350,000.

A 500-sq. m property in Port Louis can produce income from rent of around 6.17% per annum. The general rule here is that the smaller the property, the lower the yields. With a 200-sq. m property, the yield can go down to about 4.5%.

Read Rental Yields »

Taxes and Costs

Rental income tax is moderate in Mauritius

Rental Income: Rental income by nonresident individuals is taxed at 15%.

Capital Gains: There are no capital gains taxes in Mauritius.

Inheritance: There are no inheritance, gift, wealth, or estate taxes.

Residents: Residents are taxed on worldwide income at a flat rate of 15%. Residents are entitled to income tax allowances that vary depending on the family circumstance of the taxpayer.

Read Taxes and Costs »

Buying Guide

Mauritius transaction costs are high

Total round-trip cost is around 12.875% to 19.60%. Notary fees are around 0.50% to 2% of the property value, plus 15% VAT. The seller pays the transfer tax at 5% of the property value if the seller has owned the property for more than five years, and at 10% of the property value if the seller has owned the property for less than five years.

Properties are mostly quoted in either Mauritian Rupee (MUR) or US dollars (US$).

Read Buying Guide »

Landlord and Tenant

Rents are fixed for 3 years in Mauritius

Mauritius luxury villasMauritian rental law is generally pro-tenant.

Rent: The initial rent is regulated by the Fair Rent Tribunal and cannot be changed within the first three years of tenancy. Rent increases must be justified by the landlord.

Tenant Security: A landlord must go through the court system when evicting a tenant, as only District Courts have the power to evict. In case of eviction due to landlord's use of the property, the court can order that the tenant be compensated for any prejudice suffered.

Read Landlord and Tenant »

ECONOMIC GROWTH

Stable and progressive economy

Mauritius beachfront propertiesThe economy expanded by 3.8% in 2018, following annual average growth of 3.7% from 2009 to 2017, according to the Bank of Mauritius. Growth of 3.7% this year and 3.8% in 2020 is forecast by the IMF.

In 2018, unemployment fell to 6.9%, down from 7.1% in 2017, 7.3% in 2016 and 7.9% in 2015.

The budget deficit is manageable at 3.2% of GDP in 2018, unchanged from the prior year, according to the Bank of Mauritius.

Underlying inflationary pressures remained at low levels in October 2019, with core consumer prices rising by 1.8%. Inflation averaged 3.5% over the past two years.

Mauritius gdp inflation
During the recently concluded general elections held last November 7, 2019, Prime Minister PravindJugnauth’scentre-right Morisian Alliance won a comfortable majority with 42 of 70 parliamentary seats, and formed a government alone. Jugnauth succeeded his father, AneroodJugnauth, as prime minister in January 2017 without going through a popular vote.

Mauritian culture is a product of settlement by inhabitants from other civilizations, French, European, Indian, Chinese, English, and African. There is no indigenous culture. This makes Mauritius a rich melting put of religions, foods, and influences.

English is the official language, but French is widely spoken and Creole, a French dialect, is preferred by locals.
Newsletter

Get GPG fortnightly newsletters delivered to your inbox

A quick summary of global real estate trends.

Subscribe