Housing Finance in Mauritius
Overview
This profile is also available in French here.
To download a PDF version of the full 2022 Mauritius country profile, click here.
Mauritius is a 2,040-square-kilometer island in the south-west Indian Ocean. 41% of the total population lives in urban areas, with 621 people per km2. With an unemployment rate of 8.6%, Mauritius is regarded as an upper-middle-income nation. Mauritius’s economy contracted by 14.9% in 2020 but grew by 4% in 2021, official figures show. The consumer price index rose from 103.7 in 2019 to 110.6 in 2021, resulting in a steep rise in inflation levels. The current account deficit remains large, at 13.7%, compared to 9.2% in 2020, as tourism, the country’s main income stream, remains low. The tourism industry contributed 19.5% of GDP in 2019, but just 2% of it in 2021.
Affordable housing is not within everyone’s reach in Mauritius. An apartment in the city centre costs Rs 55,485 (US$ 1,215.18) per square metre on average.Inflation in the country, combined with rising construction costs, make housing largely unaffordable. The price of a 50kg bag of cement costs Rs263 (US$5.76) up 43% from 2020, and is expected to rise by 23% over two years.
The credit granted to Mauritian households amounted to Rs127.41 billion (US$2.79 billion) at the end of January 2022, of which two-thirds (67%) consisted of mortgages. With the majority of the population (89%) having a bank account, the debt levels of households have increased by Rs 9.81 million (US $214,849) over the last year. Non-performing loans in relation to total loans were valued at 5.3% in September 2021, down from 6.1% in September 2020.
A Rs 12 billion (US$ 262.81 million) programme to build 12,000 social housing units has been in place since 2020.In the fiscal year 2021–2022, an estimated $100 million will be distributed. This is in an effort to give citizens better access to financing and a larger supply of housing.
The different government cuts appear to have had an effect on rent costs. One-bedroom apartments cost Rs 17,285.71 (US$378.57) to rent in the city centre and Rs 8,932.2 (US$195.62) outside of it. It should be noted that the rent for the same apartment has decreased by 9.3% and 10.7%, respectively, to Rs 15,666.67 (US$343.11) in the city centre and Rs 7,978.33 (US$174.73) outside the center. However, given the high cost of living caused by inflation and the rise in the cost of building materials, rent costs should be expected to rise
Find out more information on the housing finance sector of Mauritius, including key stakeholders, important policies and housing affordability:
- Overview
- Access to Finance
- Affordability
- Housing Supply
- Property Markets
- Policy and Legislation
- Opportunities
- Availability of Data on Housing Finance
- Green Applications for Affordable Housing
- Websites
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2022 edition, which has up-to-date profiles for 55 African countries.
Download yearbookMauritius
Overview
The Republic of Mauritius is an island state in the South West Indian Ocean of 2 040 km² in size[1] with a population of 1,263,888 in 2021.[2] The percentage of the population that is urbanised is 41%.[3] Due to limited land availability, the country is one of the densest countries in the world, with 621 inhabitants per km². Mauritius is considered an upper-middle-income country with an unemployment rate of 8.6%.[4] Access to housing remains difficult for a good number of Mauritians with some 30,000 families on the waiting list to acquire social housing at the National Housing Development Company (NHDC).[5]
Despite a contraction of gross domestic product (GDP) of 14.9% in 2020[6], the country recorded an economic growth rate of 4% in 2021.[7] Gross value added (GVA) improved significantly from Rs 393.87 billion (US$8.63 million) in 2020 to Rs 424.89 million (US$ 9.30 million) in 2021, an increase of 7%. However, this performance remains below its pre-Covid-19 situation where the GVA was estimated at Rs 445.602 billion (US$9.76 million). The consumer price index rose from 103.7 in 2019 to 110.6 in 2021[8] resulting in a steep rise in inflation levels from 2. 7% at the end of 2020 to 6. 8% at the end of 2021 and then to 11% at the end of April 2022.[9] This increase in inflation is linked to a sharp increase in the price of food and fuel[10] and was accompanied by a depreciation of the rupee by approximately 9% in real terms in 2021. The current account deficit remains large, at 13.7% against 9. 2% in 2020, as tourism, the country’s main income stream, remains low. The tourism industry contributed 19.5% of GDP in 2019.[11]
Mauritius is very vulnerable to climate change and one of the most exposed to natural disasters due to its geographical location in an active basin of tropical cyclones.[12] Sea levels are rising at a rate of 5.6 to 9 millimeters (mm) per year, while the global average is 3.3 mm per year. Rising sea levels have also had an impact on the beaches that support tourism as erosion has reduced beach widths by up to 20 metres in the last decade.[13] Land use and densities are important considerations for housing in a shrinking island country where 25% of the land is made up of forest (and only 2% of native forest remaining).[14] The effects of climate change are experienced through reduced rainfall, drought, beach erosion, flooding and disruptions to the activities of the agriculture, tourism, industry and household sectors.[15]An extensive public sector climate change investment programme worth Rs 35.78 billion (US$ 783. 62 million) has been developed for the period 2022-2025. This programme places importance of issues related to flood management and social housing. Ultimately, more than half (53%) of the total budget, i.e., an amount of Rs18. 8 billion (US$ 411.74 million) will be allocated to flood management and one third (33%) will be earmarked for the construction of social housing. In addition, through the National Fund for Environment and Climate Change (NECCF), a budget of Rs 4.2.7 billion (US$ 93. 52 million) is allocated, with 30% of this going towards the clean-up and beautification of Mauritius,23 % towards landslide management,21% towards the the protection and management of beaches, lagoons and coral reefs and 4% in support of the green economy.[16]
[1]Global Data (2022). Mauritius. https://www.donneesmondiales.com/afrique/maurice/index.php (Accessed September 11, 2022).
[2] Statistics Mauritius (2021). Population and Vital Statistics – Republic of Mauritius, Year 2021 Highlights. https://statsmauritius.govmu.org/Pages/Statistics/ESI/Population/Pop_Vital_Yr21.aspx (Accessed August 24, 2022).
[3] The World Bank (2022). Urban population (% of total population) – Mauritius. https://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS?locations=MU (Accessed August 25, 2022).
[4] The World Bank (2022). Unemployment, total (% of total labor force) (national estimate) – Mauritius. https://data.worldbank.org/indicator/SL.UEM.TOTL.NE.ZS?locations=MU (Accessed August 25, 2022).
[5] The Mauritian (2022). NHDC – Obeegadoo : “30,000 families on the waiting list for houses”. 28 June 2022. https://www.lemauricien.com/actualites/societe/nhdc-obeegadoo-30-000-familles-sur-la-liste-dattente-pour-des-maisons/498985/ (Accessed August 25, 2022).
[6]The World Bank (2022). Overview. Mauritius. https://www.worldbank.org/en/country/mauritius/overview (Accessed August 25, 2022).
[7] The World Bank (2022). GDP growth (annual %) – Mauritius. https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=MU (Accessed August 25, 2022).
[8] Statistics Mauritius (2022). https://statsmauritius.govmu.org/Documents/Statistics/By_Subject/Other/MIF/MIF_Yr21_100822.xlsx Retrieved 25 August 2022.. Pg. 20.
[9] International Monetary Fund. and African Dept. (2022). Mauritius: Staff Report for the 2022 Article IV Consultation-Press Release; and Staff Report. 15 July 2022. https://0-www-elibrary-imf-org.library.svsu.edu/view/journals/002/2022/223/article-A001-en.xml (Accessed August 25, 2022).
[10] Ibid. See Footnote 7.
[11]Statista (2022). Contribution of travel and tourism to Gross Domestic Product (GDP) in Mauritius from 2019 to 2021. https://www.statista.com/statistics/1262269/contribution-of-travel-and-tourism-to-gdp-in-mauritius/#:~:text=In%202021%2C%20travel%20and%20tourism,Gross%20Domestic%20Product%20(GDP) (Accessed September 11, 2022).
12 World Bank (2022). Mauritius Country Summary. Climate Change Knowledge Portal. https://climateknowledgeportal.worldbank.org/country/mauritius (Accessed on 13 October 2022).
[13] Ramano, K. and Dombrowski, K. (2021). Mauritian minister warns: “It is a matter of life and death”. 23 April 2021. https://www.dandc.eu/en/article/small-island-developing-states-are-hardly-responsible-climate-change-most-affected (Accessed September 10, 2022).
[14] World Bank (2022). Mauritius Country Summary. Climate Change Knowledge Portal. https://climateknowledgeportal.worldbank.org/country/mauritius (Accessed on 13 October 2022).
[15] Mauritius Meteorological Services. (2022). Climate Exchange. http://metservice.intnet.mu/climate-services/climate-change.php Retrieved 10 September 2022..
[16] Republic of Mauritius (2022). Public Sector Investment Programme (PSIP) 2022/23 – 2024/25. https://mof.govmu.org/Documents/budget2022_23/PSIP%2010062022.pdf (Accessed August 25, 2022).
Access to Finance
The Bank of Mauritius, governed by the 2004 Act, is mandated to ensure the stability and soundness of Mauritius’ financial system.[1] There is only one credit bureau operating in Mauritius: the Mauritian Credit Information Agency (MCIB) whose main function is to collect information from credit institutions, including leasing and hire-purchase facilities, and public service bodies.[2] The Mauritian banking system is well developed with 18 banks, eight leasing companies, nine insurance companies, one licensed microfinance institution (MCB Microfinance Ltd) and nine other operators including two specialised in housing finance (Mauritius Housing Company Ltd and National Housing Development Co Ltd).[3] Banks in Mauritius provide services including: traditional banking; card payment services, credit and debit card Internet banking and mobile banking.[4] In total, the banking sector employed 8,129 people in 2021 (compared to 8,266 in 2020),[5] had 160 branches (compared to 171 in 2020), nine counters, 450 ATMs (up from 447 in 2020) and a mobile van in June 2021.[6]
At the end of January 2022, the credit granted to households amounted to Rs127.41 billion (US$ 2.79 billion) of which two-thirds (67%), or Rs 85.73 billion (US$1.88 million) consisted of mortgages. With the majority of the population (89%) having a bank account,[7] the debt levels of Mauritian households have increased by Rs 9.81 million (US$214,849) over the last year.[8] Non-performing loans in relation to total loans are valued at 5.3% in September 2021, down from a share of 6.1% in September 2020.[9]
Mortgages are granted by several providers including the Mauritius Housing Company, a non-bank deposit-taking institution specialising in housing finance.[10] The Mauritius Housing Company provides a wide range of solutions for the construction, extension, renovation, refinancing of existing home loans and the purchase of land or residential properties.[11] Mortgages are taken out at a rate varying between 4% and 7% in 2022 for an average term of 35 years.[12] In 2021, residential mortgages were estimated at Rs 51.28 billion (US$1.123 billion).[13] As of May 2020, MCB Microfinance Limited, the only licensed micro-financier in Mauritius, granted 4,959 loans to 2,878 clients worth more than Rs1 million (US$2,1.90 million).[14] The main beneficiaries of these loans remain the trade sector including manufacturing, services, transport and agriculture.
Covid-19 led public authorities to take measures to support the banking and financial sector. These measures included the reduction of the policy rate, the disbursement of a special aid package of Rs 5 billion (US$ 109. 50 million),[15] a reduction in the cash reserve rate applicable to commercial banks, a report on the repayment of capital for loans, a consolidation of banking directives and a two-year bank savings bond issue. This bond is issued in multiples of Rs25,000(US$547.52) to natural persons residing in Mauritius and to locally registered and non-profit non-governmental organisations up to Rs1 million (US$21,901). These measures have helped cushion the impact on banks’ asset quality, as evidenced by the decline in the ratio of non-performing loans to total loans from 5% at the end of March 2021 to 4%.5% at the end of September 2021.[16]
[1] Bank of Maurtius (2022). Financial Stability Mandate. https://www.bom.mu/financial-stability/financial-stability/financial-stability-mandate (Accessed August 27, 2022).
[2] Bank of Mauritius (2022). The Mauritius Credit Office Information. https://www.bom.mu/financial-stability/supervision/mauritius-credit-information-bureau (Accessed August 27, 2022).
[3] Bank of Mauritius (2022). PARTICIPANTS OF THE MAURITIUS CREDIT INFORMATION BUREAU. https://www.bom.mu/sites/default/files/list_of_participants_1.pdf (Accessed August 27, 2022).
[4] Mauritius Finance (2022). BANKING AND FINANCIAL SERVICES. https://www.mauritius-finance.com/fr/banque (Accessed August 27, 2022).
[5] Bank of Mauritius (2021). Annual Postponement. June 2021. https://www.bom.mu/sites/default/files/AR2021/ar2021.pdf (Accessed August 27, 2022). Pg.55.
[6] Bank of Mauritius (2020). Annual Postponement. June 2020. https://www.bom.mu/AnnualReport/2020/BOM_June_2020.pdf (Accessed August 27, 2022). Pg. 81.
[7] The Global Economy (2022). Mauritius : Percent people with bank accounts. https://www.theglobaleconomy.com/Mauritius/percent_people_bank_accounts/ (Accessed August 27, 2022).
[8] Bank of Mauritius (2022). Monthly Statistical Bulletin. February 2022. https://www.bom.mu/sites/default/files/msb_february_2022_issue_1.pdf (Accessed August 27, 2022). Pg. 25.
[9] Ibid.Pg. 38.
[10] Bank of Mauritius (2022). Supervision. Licensees. List of Licensees. https://www.bom.mu/financial-stability/supervision/licensees/list-of-licensees?field_licensees_type_value=3 (Accessed August 28, 2022).
[11] Numbeo (2022). Property Prices in Mauritius. https://www.numbeo.com/property-investment/country_result.jsp?country=Mauritius Retrieved 28 August 2022..
[12] Bank One (2022). Home Loan. https://bankone.mu/en/retail_produit/home-loan/ Retrieved 28 August 2022..
[13] Statista (2022). Value of outstanding residential Mortgage debt In Africa In 2021, by country. https://www.statista.com/statistics/1068887/outstanding-mortgage-debt-africa-by-country/ Retrieved 28 August 2022..
[14] MCB Microfinance (2022). MCB Microfinance reaches the Rs 1 trillion Milestone. https://www.mcbgroup.com/en/news/story/mcb_microfinance_reaches_the_Rs_1_billion_milestone_1 (Accessed August 28, 2022).
[15] DE LA COLINIÈRE, M. D. F. and ZINDEL, N. V. (2020). Mauritius: Coronavirus (COVID-19)| the Bank of Mauritius introduces a Support Programme to accompany local economic operators across all sectors. 16 March 2020. ENS Africa. https://www.ensafrica.com/news/detail/2366/coronavirus-the-bank-of-mauritius-introduces-?utm_source=Mondaq&utm_medium=syndication&utm_campaign=LinkedIn-integration (Accessed August 28, 2022).
[16] Bank of Mauritius (2021). FINANCIAL STABILITY REPORT. December 2021. https://www.bom.mu/sites/default/files/bank_of_mauritius_financial_stability_report_-_december_2021_0_0.pdf Retrieved 28 August 2022..
Affordability
Half (50%) of Mauritian households were able to obtain their residence by accessing a mortgage in 2017.[1] Despite the low levels of informality of the Mauritian economy (between 20 and 25% in 2017)[2] affordable housing is not within everyone’s reach. Acquiring an apartment in the city centre costs an average of Rs 55,485 (US$1,215.18) per square metre.[3] Therefore, the acquisition of an apartment of 50 m² in the city center, at a price of Rs 1. 345 million (US$294,56.85),is difficult for Mauritians who earn an average monthly income of Rs 22,260 (US$487.52).[4] In addition, inflation in the country, combined with rising construction costs, make housing largely unaffordable. The price of a 50kg bag of cement costs Rs263 (US$5.76),[5] up 43% from 2020.[6] The construction price index rose from 105.6 points in June 2020 to 130.5 points in June 2022, an increase of 23% over two years. Monthly household expenditure(excluding rent) is estimated at Rs 87,571.15( US$ 1,917. 90) for a family of four.[7]On average, a Mauritian household has three members, with a monthly income of Rs 36,800 (US$805.95) and an estimated monthly expenditure of Rs 28,670 (US$627.90) in 2017.
There is still high income inequality in the country. With a Gini index estimated at 0.40 in 2021, the average income of the richest 20% is eight times the average income of households in the poorest quintile. Gender inequalities also persist as only 10.4% [8]of working women were entrepreneurs, compared to 23. 6% in men.[9] In addition, women were vastly under-represented in decision-making at the highest levels of society (the number of women ministers was only 3 out of 21).
In addition to the interest rates applied and the conditions for granting credit, banks must maintain sound lending standards when granting credit facilities for the purchase/construction of residential properties. In this context, the debt-to-income ratio (DTI) is commonly used by banks in Mauritius as a micro prudential measure to assess borrowers’ ability to repay. The bank limits the DTI value for loans to a maximum of 50%.[10] The Mauritian State has introduced a repayment rate for housing loans.[11] Under this programme, a person taking out a secured home loan to build their home receives a repayment of 5% of the loan amount, up to a maximum of Rs500,000 (US$10,950.50). It also provides for a direct subsidy to make the acquisition of residential property more affordable and to allow each spouse married under the “community of property” regime to benefit from the exemptioofregistration fees for first-time buyers.
[1] MAO (2017). Mauritian residential real estate. 2 May 2017. https://www.acheteramaurice.com/limmobilier-residentiel-mauricien/ (Accessed 28 August 2022).
[2] AYASSAMY, V. (2017). International Monetary Fund: the informal sector represents 20 to 25% of our economy. 13 July 2017. Defimedia. https://defimedia.info/fonds-monetaire-international-le-secteur-informel-represente-20-25-de-notre-economie Retrieved August 28, 2022.).
[3] Numbeo (2022). Cost of Living in Mauritius. https://www.numbeo.com/cost-of-living/country_result.jsp?country=Mauritius Retrieved 28 August 2022..
[4] Salary explorer (2022). Average Salary in Mauritius 2022. http://www.salaryexplorer.com/salary-survey.php?loc=137&loctype=1 Retrieved 28 August 2022..
[5] Exportv.ru (2022). Cement price In 2021-2022. https://exportv.ru/price-index/cement Retrieved 28 August 2022..
[6] AFM (2022). Construction| Soaring material prices. 3 August 2022. https://afm.media/2022/08/03/construction-la-flambee-des-prix-des-materiaux/ Retrieved 28 August 2022..
[7] Ibid. See Footnote 35.
[8] Statistics Mauritius (2022). https://statsmauritius.govmu.org/Documents/Statistics/By_Subject/Other/MIF/MIF_Yr21_100822.xlsx Retrieved 25 August 2022.. Pg. 24.
[9] Statistics Mauritius (2022). Gender Statistics, Year 2021. July 19, 2022. Ministry of Finance, Economic Planning and Development. https://statsmauritius.govmu.org/Pages/Statistics/ESI/Gender/Gender_Yr21.aspx Retrieved 25 August 2022..
[10]Bank of Mauritius (2021). Guideline on the Computation of Debt-to-Income Ratio for Residential Property Loans. Revised June 2021. https://www.bom.mu/sites/default/files/guideline_on_computation_of_debt-to-income_ratio_for_residential_property_loans_17_06_2021_0.pdf (Accessed August 28, 2022). Pg.3.
[11] Government of Mauritius (2022). 2022/23 budget speech. https://budgetmof.govmu.org/documents/2022_23budgetspeech_french.pdf (Accessed August 28, 2022). Pg. 65.
Housing Supply
The last population and housing census conducted in 2011 recorded 359 thousand residential dwelling units. Almost all these houses were privately owned. 94% of households have running water in their homes, 96% have toilets and 99% of households have access to electricity. However, some households still lack basic facilities: 1,400 households do not have running water on their premises; 1,700 households do not have electricity; and 600 households do not have toilets.[1] To update the data on population and housing, the Mauritian State launched its 19th population and housing census in 2022.[2] With the help of 7000 agents, the housing census took place over the period from 30 April to 20 June 2022 and the population census between 19 June and 01 August 2022.
Since 2020, the Mauritian government has implemented a programme to build 12,000 social housing units with a budget of Rs12 billion (US$262.81 million), of which Rs100 million (US$2.19 million) is expected to be disbursed in the 2021/22 financial year. The Roof Slab Grant Scheme[3], introduced in1997 and initially intended for households with a monthly income of less than Rs 7,500 (US$164.26) and for families with incomes not exceeding Rs 20,000 (US$438.02provide financial assistance through a subsidy system for the start of construction or the pouring of roof slabs to complete construction. Rs 119.1 million (US$2.61 million) was distributed to 1,553 families for this programm in the 2021/2022 period.[4]
The National Housing Development Company (NHDC) will deliver 485 housing units to Wooton and Mare D’Albert by June 2023.[5] As of June 2022, 15 families have received the key to their homes of Rs700,000 (US$15,330.70) repayable over 35 years. These housing units, built as apartment blocks, range from 60 to 75 m² in size.[6]
The NHDC faces a growing backlog of beneficiaries for social housing units. Only 2,357 social housing units were built over a five-year period (between 2015 and 2020), whilst 25,582 applicants for social housing were listed in 2021. Thus, it is clear that the demand for housing far exceeds the rate at which houses are made available and the growing backlog has meant that 30% of the total number of people on the NDHC waiting list, have been on the list for more than 10 years and 13% (7,961 households) have been on the list for more than 20 years.[7] In addition, the prices of building materials, including cement, iron, paint and labour, are rising.[8] Moreover, Statistics Mauritius figures on the construction sector in the second half of 2022 confirm that construction inputs have all increased.[9] The construction price index rose by 3.7% compared with the first quarter.
In addition, for the complete removal of asbestos, the government promises to rebuild some 1,800 homes for an amount of Rs 800 million (US$17.52 million) over the next two years. In addition to the 12,000 social housing units under construction, Rs 2 billion (US$43.80 million) is planned to support the purchase of land and residential properties by individuals and 2,000 lots[10] will be put up for sale by the State Investment Corporation (SIC) and Rose-Belle Sugar Estate for residential purposes.[11]
[1] Statistics Mauritius (2011). 2011 HOUSING CENSUS – MAIN RESULTS. https://statsmauritius.govmu.org/Documents/Census_and_Surveys/ESI/esi2011.pdf (Accessed August 29, 2022). Pg.1.
[2] Statistics Mauritius (2022). 2022 CENSUS. https://statsmauritius.govmu.org/Pages/Censuses%20and%20Surveys/Census/census_2022.aspx (Accessed August 29, 2022).
[3] Republic of Mauritius (2022). Public Sector Investment Programme (PSIP) 2022/23 – 2024/25. https://mof.govmu.org/Documents/budget2022_23/PSIP%2010062022.pdf (Accessed August 25, 2022). Pg.13.
[4]ION NEWS (2022). Roof Slab Scheme: 1553 families received financial assistance in 1 year. 21 June 2022. https://ionnews.mu/roof-slab-scheme-1553-familles-ont-recu-une-assistance-financiere-en-1-an/ Retrieved 25 August 2022.
[5] Ibid. Footnote 43. Pg. 49.
[6] The Mauritian (2022). Social housing: Rs 700,000 for one unit, repayable over 35 years. 11 June 2022. https://www.lemauricien.com/actualites/societe/logements-sociaux-rs-700-000-pour-une-unite-remboursable-sur-35-ans/495130/ (Accessed August 29, 2022).
[7] Bigen Group (2022). New Social Living Development Project in Mauritius. https://bigengroup.com/project/new-social-living-development-project-in-mauritius/ Retrieved 29 August 2022..
[8] GOORAYA-POLIGADOO, L. (2021). Construction of a 1,500-square-foot house: Mauritians must plan an additional budget of about Rs 750 000. 4 August 2021. Defimedia. https://defimedia.info/construction-dune-maison-de-1-500-pieds-carres-les-mauriciens-doivent-prevoir-un-budget-supplementaire-denviron-rs-750-000 (Accessed September 11, 2022).
[9] Armoogum, N. (2022). Statistics Mauritius: The Construction Price Index increases by 3.2% in the second quarter of 2022. 11 August 2022. BUSINESS MAGAZINE. https://www.business-magazine.mu/actualites/autres/statistics-mauritius-the-construction-price-index-increases-by-32-in-the-second-quarter-2022/#:~:text=En%20effect%2C%20the index%20des,June%20(0%2C2%20%25) (Accessed September 11, 2022).
[10] Ibid. Footnote 43.Pg.66.
[11]Economic Development Board (2022). BUDGET 2021/22 BETTER TOGETHER. https://news.edbmauritius.org/budget-newsletter/pdf/EDB_Budget_Newsletter_2021-22.pdf (Accessed August 29, 2022).
Property Markets
The Covid-19 pandemic has had a strong impact on Mauritius’ property markets. In 2019, 6,278 residential building permits were issued and the implementation of restrictive measures imposed by the Mauritian government resulted in a decrease of 7%, with only 5,853 residential building permits being authorised in 2020. The lifting of the restrictive measures has led to a revitalisation of the property market through a considerable increase in the number of residential building permits being authorised with an increase to 7,800 building permits in 2021. This is an increase of 33% when compared to 2020, and 24% when compared to 2019. However, even though investment in residential housing increased from Rs 85 billion (US$45.6.6 million) in 2020 to Rs 24.88 billion (US$544.90 million) in 2021, it remains below its pre-Covid-19 value of Rs 26. 52 billion (US$580.8million).[1]
The Mauritian property market remains attractive to investors as it offers opportunities for both citizens and non-citizens and members of the diaspora to access affordable housing. It attracts foreigners such as French and South Africans.[2] Moreover, one in two real estate buyers on Mauritian territory is of French nationality.[3] Another asset of the Mauritian real estate market is the capped taxation at a single rate of 15%.[4] It also offers a fairly short property registration time (17 days) with a cost of 0. 6% of the property value and the registration has only five procedures.[5]
The government has reduced the thresholds of the VAT refund scheme criteria for residential buildings and apartments, and has introduced other incentives such as the refund of part of the cost of ownership to stimulate residential construction projects.[6] The government grants an exemption from registration fees for first-time buyers on the first Rs5 million(US$109,505.04) of the cost of built residential property. Also, the sale of a residential unit in a project developed on state land and intended for the elderly under the real estate development programme will be exempt from the payment of the tax on the transfer of rental rights on state land. Finally, the abolition of municipal tax on the family residence from 1 July 2022 makes it possible to reduce the tax burden of the 110,000 contributing families.[7]
The government’s various reductions seem to have had an impact on the price of rent. The rent for a one-bedroom apartment in downtown Port Louis was Rs 17,285.71 (US$378.57) and Rs 8,932.2 (US$195.62) outside the city centre.[8] It is noted that the current rent of the same apartment is estimated at Rs15,666.67 (US$343.11) in downtown Port Louis and Rs 7,978.33 (US$174.73) outside the city centre, a decrease of 9.3% and 10.7% respectively. [9] However, rent prices should be expected to rise in view of the high cost of living due to inflation and the increase in the prices of building materials for construction.
[1] Statistics Mauritius (2022). https://statsmauritius.govmu.org/Documents/Statistics/By_Subject/Other/MIF/MIF_Yr21_100822.xlsx (Accessed on 30 August 2022). Pg. 38.
[2] PAM GOLDING (2022). REAL-ESTATE TRENDS IN MAURITIUS 2020/21. https://thelife.pamgolding.mu/insights/real-estate-trends-in-mauritius-2020-21/14/01/2021/ (Accessed August 30, 2022).
[3] Tachdjian, K. (2022). Real estate: price, taxation, what you need to know before investing in Mauritius. 7 May 2022. Les Echos. https://www.lesechos.fr/patrimoine/immobilier/immobilier-prix-fiscalite-ce-quil-fait-savoir-avant-dinvestir-a-lile-maurice-1405437 (Accessed August 30, 2022).
[4] Mauritius Visa (2022). Mauritius and its taxation. https://www.visa-maurice.fr/ile-maurice-fiscalite/#:~:text=La%20fiscalit%C3%A9%20mauricienne%20a%20%C3%A9t%C3%A9,jamais%20%C3%AAtre%20tax%C3%A9%20deux%20fois. (Accessed August 30, 2022).
[5] World Bank (2021). https://www.doingbusiness.org/content/dam/doingBusiness/excel/db2020/Historical-data—COMPLETE-dataset-with-scores.xlsx (Accessed 2022-08-30).
[6] KPMG (2021). Mauritius Budget Highlights 2021/22. 11 June 2021. https://assets.kpmg/content/dam/kpmg/mu/pdf/2021/mu-Mauritius-Budget-Highlights-2021-2022.pdf (Accessed August 30, 2022). Pg.28.
[7]Ibid. Footnote 43.. Pg. 82.
[8] Ramparsad, S. and Nadasan, M. (2021). Africa Housing Finance Yearbook 2021: Mauritius profile. https://housingfinanceafrica.org/app/uploads/2021/12/Mauritius.pdf (Accessed August 30, 2022).
[9] Numbeo (2022). Cost of Living in Port Louis. https://www.numbeo.com/cost-of-living/in/Port-Louis Retrieved 30 August 2022.
Policy and Legislation
The Mauritian Government is working to facilitate access to housing for all Mauritians and to create a legal and regulatory framework to facilitate foreign investment in affordable housing. A series of laws and legislations have been formulated by the Government of Mauritius to strengthen and modernise the legal and institutional structure of planning, monitoring and enforcement of physical development to achieve meaningful and sustainable results.[1] In addition to its role as a planner, the Mauritian State is committed to providing social housing to the population, particularly deprived through the Ministry of Housing and Spatial Planning (MHLUP) and the NHDC.[2]
Recently, the Mauritian government through the Real Estate Agent Authority Act 2020 proposes to organise the property market that has long remained unregulated and somewhat fragmented.[3] This law aims to establish a Real Estate Agents Authority (REAA) that will help provide increased protection for real estate actors and transactions in Mauritius, while preserving the good reputation of the Mauritian real estate sector.[4] Added to this is the adoption of a new climate change act in 2022 and the creation of a Committee on Climate
In the 2022/23 national budget, the Mauritian State has extended the two measures that were adopted in 2021 concerning the home ownership scheme and the housing loan scheme for Mauritians until 30 June 2023. To this end, a 5% refund of up to Rs 500,000 (US$10,950.50) for an additional year is applied and each spouse married under the “community of property” regime is allowed to benefit from the exemption from registration fees for first time home purchasers.[5] Also, the finance law provides for foreigners holding residence permits the possibility of acquiring a residential property of a minimum of Rs15. 98 million (US$349,978.10), provided a 10% contribution is made to the Solidarity Fund.[6]
In addition to the desire to regulate the real estate sector, the Mauritian State provides in its national budget of 2022/23, a pipeline of private sector investments of more than Rs 200 billion (US$ 4. 38 million) being facilitated by the Economic Development Board (EDB). In order to strengthen the capacity and competitiveness of local construction companies, the State plans to set up the Construction Industry Training Centre (CITC). To this end, it intends to reserve public contracts of less than Rs 20 million (US$438,020.15) for small contractors, restore the margin of preference for local contractors and offer construction companies loan facilities of up to Rs 25 million (US$547,525.19) at a concessional rate of 3.5% per annum.[7]
To encourage private sector participation in housing provision, for-profit companies are required to donate 2% accounting profits to corporate social responsibility activities.[8] The State also sets up public-private partnerships. For example, the construction of the 12,000 social housing units is entrusted to the NSLD, a privately incorporated subsidiary of the NHDC.[9]
[1] Government of Mauritius (2022). Laws. https://govmu.org/EN/infoservices/housing/Pages/actsandlegislation.aspx Retrieved 30 August 2022.
[2] Ministry of Housing and Land Use Planning (2020). Housing. https://housing.govmu.org/Pages/Dept%20and%20Org/Divisions/Housing.aspx (Accessed August 30, 2022).
[3] CABINET E CONSEIL & ASSISTANCE (2022). The real Estate agent authority act 2020. https://www.e-conseil-assist-office-management.com/prestations/expertise-conseils-et-assistance/immobilier-%C3%A0-maurice/une-profession-r%C3%A9glement%C3%A9e/ (Accessed August 30, 2022).
[4] DTOS (2021). Mauritius : duties and responsibilities of real Estate agents Under the real Estate agent authority act 2020. 23 March 2021. https://www.dtos-mu.com/mauritius-duties-and-responsibilitiesof-real-estate-agents-under-the-realestate-agent-authority-act-2020/ (Accessed August 30, 2022).
[5]Ibid. Footnote 43.). Pg. 66.
[6] NESTENN (2022). NATIONAL BUDGET 2022-2023. 7 June 2022. https://www.nestenn.mu/fr/actualites-immobilier-ile-maurice/article/budget-national-2022-2023-B180 (Accessed August 30, 2022).
[7])Ibid. Footnote 43. Pg. 17.
[8] MOFED (2016). The New Corporate Social Responsibility (CSR) Framework. 11 August 2016. https://ionnews.mu/wp-content/uploads/2016/08/New-CSR-Framework.pdf (Accessed August 31, 2022). Pg. 1.
[9] New Social Living Development (2022). Overview. https://nsld.mu/ (Accessed August 31, 2022).
Opportunities
Mauritius presents very attractive business opportunities in the property market in that it has a very attractive tax system and offers tax exemptions to attract foreign investors. Added to this is the involvement of private individuals in the provision of social housing through public-private partnerships. There is an opportunity related to the use of blockchain technology, that would significantly reduce the use of falsified documents. There is a real opportunity for investors to look into green housing as it is less expensive and more suited to local conditions.. There are also opportunities for renewable energy sources in support of housing. However, any infrastructure provided, should be installed so that it can withstand storms and cyclones.
Availability of Data on Housing Finance
Data on housing and finance are largely provided by the Bank of Mauritius and Statistics Mauritius, the national statistics agency. The Bank of Mauritius centralises banking and financial data, Statistics Mauritius‘ mission is to compile statistics relating to the social, economic, demographic and financial activities of the country. The official government website provides statistics on a set of indicators including housing. Apart from demographic data and gender inequalities, most of the statistics provided are not disaggregated by gender. One of the challenges of housing demand data remains the updating of the general population and housing census database. This has been done this year and so there should be updated data in the near future. Mortgage data are not available to the public in the same way as real estate agents despite the existence of a land registry overseen by the Registrar General’s Office. There is a clear lack of data on green housing despite awareness and political will to take climate change into account in the country’s development projects and programmes.
Green Applications for Affordable Housing
Mauritius mainly uses imported oil and coal to meet its energy needs. In 2018, nearly 80% of the energy consumed in the country was generated from non-renewable sources, mainly petroleum products and coal. [1] Just over 20% of energy consumption comes from renewable sources, mainly bagasse (using sugarcane), hydropower, wind, solar and landfill gas.[2] Almost all households have access to electricity (99.7%) with a consumption of about 2,153 kWh per capita.[3] The Mauritian government has set itself the goal of reaching 40% of renewable energy in its electricity mix by 2030. To do this, large-scale solar and wind projects have been started with a capacity of 80 MW connected to the grid. At the household level, the State, through tax exemptions, encourages the use of an energy-efficient renewable source to generate part of the electricity consumption.[4]Despite the desire to diversify its energy mix and despite the introduction of the climate law, the promulgation and application of the texts are not yet effective.
A local company called “Koto Mauritius” has been building eco-friendly homes since 2016. According to its director “the ecological house is stronger and able to withstand cyclones and earthquakes. It uses a very different construction technique from the usual approach and can be completed in 25 days at a lower cost ranging from Rs 1,500 (US$32.85) to Rs 1,600 (US$35.04) per square foot. It is beneficial in terms of energy because it uses solar panels.” The firm offers a 20-year warranty for a new ecological house built. [5] The MCB in partnership with the GBCM seeks to promote the “passive building”.[6] This is a standard for design and construction for ultra-low energy buildings offering high levels of comfort for occupants as well as resilience to future climate change.[7] However, there is a low take up of these types of construction
[1] Enedis (2019). Sugar cane creates electricity in Mauritius. 31 January 2019. https://afrique.latribune.fr/entreprises/la-tribune-afrique-de-l-energie-by-enedis/2019-01-31/la-canne-a-sucre-cree-de-l-electricite-a-l-ile-maurice-805817.html (Accessed 11 September 2022).
[2] Jaulim, F. (2020). Electricity production in ten years – 40% renewable: sweet utopia or feasible project? 12 February 2020. Defimedia. https://defimedia.info/production-delectricite-dans-dix-ans-40-de-renouvelable-douce-utopie-ou-projet-realisable (Accessed September 11, 2022).
[3] Global Data (2022). The energy budget in Mauritius. https://www.donneesmondiales.com/afrique/maurice/bilan-energetique.php (Accessed September 11, 2022).
[4] CABINET E CONSEIL & ASSISTANCE (2022). Renewable energies on the island Mauthor. https://www.e-conseil-assist-office-management.com/investisseurs/investir-%C3%A0-mauritius/seize-opportunities%C3%A9s-d-investissement/les-%C3%A9nergies-renouvelables/#:~:text=L’Ile%20Maurice%20consomme%20environ,r%C3%A9sidu%20de%20canne%20%C3%A0%20sucre (Accessed September 11, 2022).
[5] RAMASAWMY, P.C. (2016). Ecological house: a new concept established in Mauritius. 8 October 2016. Defimedia. https://defimedia.info/maison-ecologique-un-nouveau-concept-implante-maurice (Accessed August 31, 2022).
[6] The Gazette (2018). Design your home differently with the MCB. 27 July 2018. https://www.lagazette-mag.io/concevoir-sa-maison-autrement-avec-la-mcb/ (Accessed September 11, 2022).
[7] Robinson, J. Milne, A., Sepulveda, P. et McGough, M. (2021). Passive House the Way Forward to reduce climate change impacts. 28 October 2021. https://www.aurecongroup.com/thinking/thinking-papers/passive-house-climate-change-impacts (Accessed September 11, 2022).
Websites
Bank of Mauritius www.bom.mu
Government of Mauritius www.govmu.org/
Statistics Mauritius www.statsmauritius.govmu.org/
Mauritius Housing Company Ltd www.mhc.mu
National Housing Development Company. Ltd www.nhdcmauritius.com
Ministry of Finance, Economic Planning and Development www.mof.govmu.org/
Association of Real Estate Agents www.eaa-mauritius.com
Ministry of Housing and Landswww.housing.govmu.org
Ministry of Gender Equality and Family www.gender.govmu.org/
Construction Industry Development Council www.cidb.mu
