As of 2023, the Algerian banking system consists of 28 banks and financial institutions a l headquartered in Algiers.¹¹ Of the 20 banks, 12 offer Islamic finance products and services. Some of these products make it possible to acquire loans intended for housing. The network of banks and financial institutions in Algeria grew modestly in 2023, with 1 746 branches compared to 1 720 in 2022. The number of active bank accounts in dinars recorded a growth of 6.6% over the same period, reaching a total of 12 818 657 accounts in 2023, compared to 12 028 816 in 2022. Accounts held by legal entities account for 5% of this total, while accounts held by natural persons constitute the vast majority with 95% of the total.¹² Finally, the number of active open accounts in dinars and foreign currencies increased slightly to 3.41 accounts per person of working age, compared to 3.26 accounts in 2022.¹³

Loans granted increased by 5.8% in 2023, bringing the total outstanding amount to DA10 695 bilion (US$79.5 bilion). The public sector receives 41.69% of these credits.¹⁴ The rest was granted to the private sector, with a notable increase in loans to private companies of 7.1% and to households of 10.5%.¹⁵ Thus, after a slight decline of 0.3% in 2022, medium- and long-term loans in Algeria rebounded to reach DA6 502.5 bilion (US$48.4 bilion) at the end of 2023, marking a growth of 4.7%. This increase is mainly due to the increase in long-term loans (more than 7 years), which increased by 6.6%, while medium-term loans (between 2 and 7 years) decreased by 1.3%. State-owned banks continue to dominate this segment, granting nearly 92% of medium- and long-term loans in 2023, compared to only 8.2% for private banks. In terms of structure, the share of long-term loans incread from 76.4% in 2022 to 77.8% in 2023, while that of short- and medium term loans decreased from 23.64% to 22.28%.¹⁶

In terms of specific products, in 2023, Islamic financing by “Salam” dominates with 40.9% of the market, up from 39.1% in 2022. Salam financing is a credit financing formula that a lows customers to finance their purchases or projects in exchange for a profit margin from the bank. The Salam formula has proven to be useful compared to the traditional financing regime based on interest-rate credit, due to the ease of repayment and more flexibility offered to customers. In the context of housing construction, it can finance up to 70% of the overall cost of the construction of the property, with a deductible period of up to 18 months and a repayment period of up to 30 years. For a home extension, it is possible to obtain up to 100% of the overal cost with a deductible period of up to 6 months and an attractive financing rate depending on the customer.

The “Murabaha” folows with 30.4%, down from 32.9% in 2022. It is a type of financing that complies with the principles of Sharia and a lows the customer to acquire a property without taking out a loan with interest. The duration of Murabaha real estate financing can be up to 30 years for clients over 40 years old, and up to 40 years for young people aged 40 or younger. The Murabaha is a triangular transaction between the supplier, the Islamic bank and the customer, which involves a double transfer of the property: the bank acquires the property from the supplier and resels it to the customer. This system makes it possible to bypass traditional banking interests and to respect the principles of Islamic finance.

The “Ijara” is the third most requested offer by customers with 21.9% of the market in 2023, lower than the 22% in 2022. This financing contract consists of the acquisition of a real estate asset (new or old home) by the bank, folowed by a long-term lease to the customer. The contract is characterised by the ownership of the property remaining at the bank throughout the period of the contract, while the customer benefits from the right of use.

In terms of amounts, financing by “Salam” reached DA187.7 bilion (US$1.4 bilion) in 2023, compared to DA153.9 bilion (US$1.1 bilion) in 2022. The “Murabaha” increased to DA139.5 bilion (US$1 bilion), while the “Ijara” amounted to DA100.4 bi lion (US$7.5 mi lion) in 2023, compared to DA86.48 bilion (US$642.7 milion) in 2022. The products “Istisna’a”, “Moudaraba” and “Moucharaka” continue to be the least used, with outstanding amounts of DA18.5, DA8.3 and DA4.2 billion (US$137.5 milion, US$61.7 milion and US$31.2 milion) respectively in 2023.¹⁷

Algeria has the Algiers Stock Exchange. This stock exchange is organised in the form of a Stock Exchange Management Company (SGBV), whose main shareholders are banks. This company is an organised and regulated framework at the service of Intermediaries in Stock Exchange Operations as professionals to enable them to carry out their missions in accordance with the laws and regulations in force. SGBV takes care of operations such as the practical organisation of the IPO of securities or the material organisation of stock exchange sessions and the management of the trading and quotation system. It includes different types of markets such as bonds, sma l and medium-sized enterprises (SMEs), Treasury Bonds (OATs), and of course a main market for listed companies. These markets alow the financing and refinancing of the various players involved in them.

In 2024, Algeria has 10 million housing units, with an average of 4.18 occupants per unit.¹⁸ The majority of households are homeowners (74.8%). Only 10.4% of the housing stock is rented and it is more concentrated in urban areas, where it accounts for 13.4% of housing units.¹⁹

This high proportion of owner households is the result of the State’s constant work to provide affordable and adequate housing for al. This is reflected in the creation of a set of social housing programmes over several years. Thus, the “Assisted Promotional Housing” (LPA) programme, which includes individual and collective housing, a lows the acquisition of properties with a surface area of between 50 and 105m for costs ranging from DA2 500 000 (US$18 582) to DA5 100 000 (US$37 907).²⁰ The “rent-purchase” programme alows you to obtain F3 type properties between 70 to 85mQ according to very strict procedures.²¹ As far as rural areas are concerned, the Algerian government has set up a special “Rural Housing” programme with an acquisition cost of DA1 000 000 (US$7 433) for the 10 southern willayas and DA700 000 (US$5 203) for the rest of the willayas. This programme is intended for any person who resides in one of the municipalities concerned or carries out an activity in a rural area.²²

Although these programs allow a large part of the population to become homeowners, there is still a fringe that does not meet the eligibility conditions. This part of the population most often resorts to self-construction to meet the need for housing through the purchase of land. However, acquisition prices remain high. For example, for the 2023/24 period, it will be necessary to pay at least between DA140 000 and DA253 000 (US$1 041 and US$1 881) per m for bare land in a residential area located in the Waliya of Algiers.²³ In peripheral areas, this amount varies between DA100 000 and DA207 000 (US$743 and US$1 539).²⁴ In the Waliya of Constantine, the price per mQ for a bare plot of land in a residential area is between DA3 200 and DA141 000 (US$24 and US$1 048).²⁵

These amounts are still high for a large part of the population in terms of salaries. Indeed, the average annual salary is DA42 800 (US$318) with a better remuneration in the public sector (DA60 100, or US$447) compared to the private sector (DA34 900, or US$259).²⁶ Once the home has been acquired, the monthly charges (water, electricity, internet) are low. Households pay between DA2 987 and DA10031 (US$22 and US$75) to meet their expenses, depending on the period and the city of residence. On average, these charges are DA5 264 (US$39).²⁷

There are several possibilities for financing the acquisition of property. Through government programmes, the applicant must generally pay at least 10% of the price of the property he or she wishes to own. Thus, in the case of the Rent-to Own Housing programme, once selected, the beneficiary must pay 10% of the price of the property under a firm option to purchase.²⁸ Another option still within the framework of the subsidised programmes, the Caisse Nationale d’Épargne et de Prévoyance-banque, via the programme for the purchase of Free Promotional Housing, finances up to 100% of the sale price.²⁹

In 2023, the construction sector in Algeria experienced a slightly slowed growth, recording a rate of 3.7%, compared to 4.0% in the previous year. Despite this slowdown, the sector remains a pilar of the national economy, ranking third among the growth drivers with a contribution of 10.8% in 2023, although down from 15.1% in 2022. The share of construction in the country’s Gross Domestic Product (GDP) at current prices nevertheless increased, reaching 12.9% in 2023, compared to 12% in 2022, underlining the importance of this sector for the economy.³⁰

The number of housing units delivered in Algeria in 2023 reached 230 700 units, down from 245 000 units delivered in 2022. This decrease was particularly marked in the categories of subsidised housing, vacant promotional housing, and public promotional housing. Subsidised housing fell by 9.6%, in contrast to a 32% increase in 2022. Similarly, vacant promotional housing decreased by 9%, while it had increased by 39.1% the previous year. Public promotional housing recorded a
drastic drop of 92%, compared to a decrease of 60.9% in 2022. This decrease is related to the long-term nature of public promotional housing programmes, the completion of numerous projects, as well as the large number of deliveries made
in 2022.³¹

However, social housing deliveries increased, reaching 31 500 units in 2023, an increase of 28.1% compared to the 24 600 units in 2022. In addition, the self build category also saw an increase, with 15 900 units delivered in 2023, up 19.6% from the previous year’s 13 300 units.³² The construction of housing is mainly due to partnerships between the State and real estate developers. In fact, real estate developers build housing that meets the specifications of government initiatives. In return, they benefit from a l the advantages of participating in this type of project.

The building materials sector has become a real national pride because of its contribution to the achievement of the objective of building a l-Algerian housing. Today, the sector uses materials and products sourced or manufactured on the national territory and of international quality. After many years of dependence on imports, Algeria has managed to achieve self-sufficiency in the production of cement, clinker, rebar, ceramics, and other building materials.³³

The rapid development of the building and public works (BTP) sector in Algeria is attributed to the significant advances made by construction companies and those specialising in construction materials, particularly cement and reinforcing steel. This development resulted in exports of construction materials in 2023 worth DA161.4 bilion (US$1.2 bilion).³⁴

To make life easier for citizens and modernise the real estate sector, the Algerian administration has, within the Ministry of Finance, a service ca led “Domaine National”. This state and land administration occupies a crucial place in the socio economic landscape as an expert and notary of the State for land and real estate operations. Its main tasks include the organisation and management of public assets, protection against any physical or legal attack on State property, control of the conditions of documents relating to immovable property, whether public or private, as well as other real property rights.³⁵

The Domaine National has adopted new online services to modernise the real estate sector. Among the notable initiatives, digital platforms now a low citizens to apply for land certificates from home, reducing delays. An assistant to the real estate governor position has been created to expedite the issuance of land documents. A national number has also been introduced to improve property tax collection and combat tax evasion. With regard to the land census, the surveying process has reached 98% throughout the national territory, including 100% for desert and steppe lands and 70% for urban surveying. An inventory of 9.3 million real estate units significantly expanded the tax base, while 7-9% of land of unknown origin was listed. A protocol has even been signed to guarantee the right of follow-up to absentee owners during land surveys.³⁶

The issue of property rights for women in Algeria remains a socially and legally entrenched aspect. The Constitution guarantees and protects the right to property, and women who have the necessary financial means can freely acquire such property. However, in practice, women are subject to discrimination and prejudice. The Family Code, amended in 2005, continues to govern key aspects of family life such as marriage, divorce, child custody, filiation and inheritance, based on Muslim law, which is very much in favour of men. This legal framework maintains inequalities between men and women, particularly in terms of rights. Women, especially divorced, widowed or single mothers, face increased difficulties in accessing housing. Housing policies do not take into account the gender dimension, which aggravates existing discrimination and challenges related to patriarchal traditions.

The pandemic has caused a virtual paralysis of the real estate market. Many real estate agencies have ceased their activities, without renouncing their approvals, thus distorting the official statistics. As a result, the formal sector is shrinking and a large proportion of real estate transactions, around 90%, now take place in the informal sector. This reality is beyond the control of the authorities, and 75% of transactions are under-reported, resulting in a significant loss of revenue for the Public Treasury. In addition, the lack of a fixed price scale, especially for short-term rentals, can affect housing affordability.³⁷

The prices of real estate rentals in Algeria are determined by owners or intermediaries without any real precise standards, which makes rents vary from DA40 000 (US$297)³⁸ to more than DA120 000 (US$892)³⁹ for an F3 apartment (reference of real estate agents) in an urban area, depending on the location and standing. The market is seeing a drop in prices due to the pandemic, the massive distribution of housing through government programmes and the departure of multinational companies from the territory, which has reduced rents, especially for villas. The president of the National Federation of Real Estate Agencies (FNAI) proposes to regulate this market by making it compulsory to go through accredited estate agencies, which would ensure a greater concordance between the property and its estimated value.

The Algerian state is the main player in the housing sector. Through partnerships with the private sector it is working to provide affordable housing. Thus, through the finance laws, it provides the necessary impetus for the realisation of these projects.

The Finance Law for 2024 proposes a 10% allowance for beneficiaries of AADL (Free Promotional Housing) who have already paid 25% of the price and wish to pay the rest. It also proposes that the Treasury pay the interest during the deferral
period and subsidise interest rates at 100% for loans related to the construction of 50 000 rent-purchase homes. It plans to extend the deadline for the purchase of public rental housing until the end of 2025, and the National Real Estate Development Company (ENPI) is authorised to freely sell unsold public promotional housing (LPP), subject to the repayment of indirect state aid.⁴⁰ With regard to the creation of new units and their distribution, it provides for the registration of 460 000 housing units of all types, including 230 000 rural housing units. This does not consider the AADL 3 programme, which was scheduled to launch in the first half of 2024.⁴¹ The final objective of the 2024 Finance Law is to provide a total of 1 000 000 housing units to the population during the year 2024, to eliminate the housing deficit in the country. However, the construction industry reports blockages in the implementation of this plan due the complexity of the construction process, which requires additional time and costs.

The 2024 Finance Law will support all the programmes that have already been launched and that have contributed to providing housing to a large part of the population, including the diaspora. The Rural Housing Programme offers assistance between DA700 000 and DA1 000 000 (US$5 203 and US$7 433) for the Algerian community living abroad, a lowing them to acquire a property between 80 and 120 m at a price of DA95 000 per m (US$706).⁴² The Algerian Government promulgated Law No. 24-04 on 26 February 2024, establishing new rules for prevention, intervention, and risk reduction in the context of sustainable development. One of the key measures of this legislation is the formal ban on building in several risk areas. These areas include active seismic faults, geological hazard areas, safety perimeters around industrial areas, as we l as land adjacent to hazardous industrial or energy facilities.⁴³

The Algerian housing sector is undergoing a major transformation. Al of its players are working to ensure that it modernises and organises itself to better maintain its position as second in the country’s overa l growth. The State, the leading player in this sector, is striving to create a favourable financial framework. To do this, the State is working together with banks to create products that are best suited to the needs of the Algerian population and by setting clear and specific objectives, such as the delivery of one mi lion units by the end of 2024. Real estate developers, but especially real estate agencies, by demonstrating better organisation and increased professionalism, will a low greater visibility and new dynamism.

Of note are the efforts made to make the construction sector self-sufficient in  terms of building materials, especially in the production of cement, clinker, rebar, ceramics and various other materials, according to international standards. This
situation a lows Algeria to position itself as an exporter of construction materials and thus creates new sources of income.

However, some challenges remain. Growing demand, linked to rapid urbanisation, is likely to exceed supply, despite production efforts. In addition, the increase in the price of construction materials, amplified by global economic variations, could hinder access to housing for the poorest households, even if Algeria is positioned as an exporting country.

The banking sector, even if it plays an essential role in the design of adapted financial products, sometimes struggles to offer solutions that are truly affordable for all households, especially the most vulnerable. Projects are slowed down by bureaucracy and delays in obtaining building permits, resulting in delays in deliveries.

In addition, even if developers and real estate agencies have strengthened their professionalism, transparency in the management of real estate projects still needs to be improved. The proliferation of stakeholders in this sector without adequate coordination accentuates the overall inefficiency. Finally, although the sector is modernising and the outlook is encouraging, these challenges must be taken into account to ensure a more balanced and inclusive development of the affordable housing market. 

Data on housing finance are available and accessible, although the dataset is not always up-to-date. The main data collection structures are: Firstly, the Central Bank which collects, synthesizes and publishes data on all aspects of the economy in its annual report which gives a comprehensive understanding of the country’s situation.

The Ministry of Housing, Urban Planning and Urban Affairs which publishes data on everything related to the housing sector. The data is updated regularly.

Ministry of Foreign Affairs and National Community Abroad:
https://www.mfa.gov.dz/fr

STATISTA:
https://fr.statista.com/

Directorate General of Taxes:
https://www.mfdgi.gov.dz/fr/

Caisse Nationale d’Épargne et de Prévoyance-Banque:
https://www.cnepbanque.dz/web/

1. Ministry of Foreign Affairs and the National Community Abroad. (2023). Algeria in brief.
2. World Bank. (2023).Algeria, Overview.
3. Editorial team AE. (2024).Algeria: 46.7 million inhabitants on 1 January 2024 (ONS). 12 July 2024.Algerie Eco. (Accessed 6 July 2024).
4. Statista. (2024). Share of urban population in total population in Algeria from 2000 to 2022.
5. World Bank. (2023).Algeria, By theme, Poverty & Inequlity.
6. See footnote 2.
7. Missionary Mutual Aid. (2023). Missionary Mutual Aid. Poverty rate in Algeria: concerns are growing.
8. Bank of Algeria. (2024).Annual Report 2023. https://www.bank-of-algeria.dz/rapports-annuels/ (Accessed 10 July 2024). Pgs. 3-4.
9. See footnote 8. Pg. 4.
10. See footnote 8. Pg. 4.
11. See footnote 8. Pg. 46.
12. See footnote 8. Pg. 47.
13. Ibid.
14. See footnote 8. Pg. 52.
15. See footnote 8. Pg. 54.
16. Ibid.
17. See footnote 8. Pg. 56.
18. Algeria Today (2024).A total of 460,000 units planned for 2024: the one million housing programme is taking shape. 20 November 2023.
19. Centre for Affordable Housing finance (2023). Housing Finance in Africa Yearbook 2023. Algeria.
20. Ministry of Housing, Urban Planning and Urban Affairs. (2024). Subsidized promotional housing. https://www.mhuv.gov.dz/?p=5126&lang=fr (Accessed 20 July 2024).
21. Ministry of Housing, Urban Planning and Urban Affairs (2024). Rental purchase. https://www.mhuv.gov.dz/?p=5124&lang=fr (Accessed 20 July 2024).
22. Ministry of Housing, Urban Planning and Urban Affairs (2024). Rural housing. https://www.mhuv.gov.dz/?p=5118&lang=fr (Accessed 20 July 2024).
23. Directorate-General of Taxes. (2024). Real Estate Price Benchmark >2024-2023> Centre Region > Sale Price. https://tinyurl.com/46twahzj (Accessed 22 July 2024).
24. Ibid.
25. Directorate-General of Taxes. (2024). Real Estate Price Reference >2024-2023 > Eastern Region > Sale Price. https://tinyurl.com/5e6ty3z2 (Accessed 22 July 2024).
26. Ldir,A. (2024).TSA Algeria. What is the average salary in Algeria? https://www.tsa-algerie.com/quel-est-lesalaire-moyen-en-algerie/ (Accessed 23 September 2024).
27. How much does it cost?. (2024). How Much Does It Cost? Price of a month’s charges for housing in Algeria in 2024? https://www.combien-coute.net/electricite/algerie/ (Accessed 26 September 2024).
28. Ministry of Housing, Urban Planning and Urban Affairs (2024). Rental purchase. https://www.mhuv.gov.dz/?p=5124&lang=fr (Accessed 20 July 2024).
29. Caisse Nationale d’Epargne et de Prévoyance-banque. (2024). Loans to individuals. Loans at subsidized rates.
    https://www.cnepbanque.dz/web/particuliers/credits/ (Accessed 22 July 2024).
30. See footnote 8. Pg. 22.
31. See footnote 8. Pg. 22.
32. Ibid.
33. Algeria Press Service. (2023). 60 years after independence, the building materials industry is building a solid foundation. 10 February 2023.
34. African manager. (2024).African manager. Algeria: Export of construction materials worth $1.2 billion. 11 May 2024.
35. Ministry of Finance. (2023). Directorate-General of the National Domain: missions and organizations. https://tinyurl.com/2vdhfuna (Accessed 30 July 2024).
36. I.K. (2023). Digitization of the real estate sector. https://ebourse.dz/numerisation-du-secteur-de-limmobilier/
    (Accessed 31 July 2024).
37. Bersali, A. (2023). Informal circuit, health crisis and decline in purchasing power: the real estate market is stagnating. 7 March 2023. EL Watan –dz.com.
38. Algeria announces. (2024).Algérieannonces.com. Rental F2 converted into F3. https://tinyurl.com/aj6kwmzw (Accessed 19 September 2024)
39. Algeria announces. (2024).Algérieannonces.com. Rental F3. https://tinyurl.com/5bxu3yn8 (Accessed 19 September 2024)
40. Algeria Focus (2024).Algeria Focus. 2024 Finance Law in Algeria: What changes to expect? https://tinyurl.com/mr24csda (Accessed 15 July 2024).
41. Algeria press service. (2024). Housing: the distribution of the 2024 programs across the wilayas will be completed in the second half of the year. https://tinyurl.com/yc5h93hp (Accessed 3 August 2024).
42. Ministry of Housing, Urban Planning and Urban Affairs. (2024). Housing. LPP for the Algerian community living abroad. https://www.mhuv.gov.dz/?p=5115&lang=fr (Accessed 3 August 2024).
43. Benali, M. (2024).THE EXPRESSDZ. Algeria: Construction banned in several disaster risk areas. https://www.express-dz.com/2024/03/20/algerie-la-construction-interdite-dans-plusieurs-zones-a-risque-decatastrophe/ (Accessed 3 August 2024).