Country Guides Country Guide: Cape Verde

Date Published:

18/11/2009

The Cape Verde Islands are an archipelago of nine palm tree fringed islands in the Atlantic Ocean, approximately 350 miles off the west coast of Africa. Should you buy there?

By Gordon Miller

Likened to the Caribbean – but closer to the UK – the islands are diverse, some lush, some relatively barren, but all have a distinct Creole culture and a party atmosphere. The islands were catapulted into the media spotlight around 2006 when A Place in the Sun tipped the islands as one to watch for property investment.

The TV programme’s interest was fanned by the Cape Verde Islands’ government’s decision to open up the islands to leisure and residential tourism. Foreigners were permitted to purchase and own property, developers were encouraged to build via advantageous tax benefits, and hey presto – you have yourself a new overseas property destination.

The plan worked well until late 2007 when the world as we knew it stopped turning. The downturn impacted savagely on such a new tourism market, one with very little infrastructure, and as the public stopped buying new homes throughout 2008 and the first half of 2009, the Cape Verde Islands largely put their grand plans on ice.

That was then and this is now. Local agents have reported the market has started to pick up. The market was not over-inflated before the credit crunch, so hasn’t had to correct itself dramatically. Prices are settling at a level that is low enough to attract buyers but high enough to encourage sellers back into the market.

Stuart Law, chief executive of property investment company Assetz, is even more sanguine about the islands’ future. He says, ‘Cape Verde is currently experiencing one of the highest supply/demand imbalances in the world with the tourist industry booming. The credit crunch has slowed development and is creating a supply shortage, so early investors are set to benefit from strong capital gains in the mid-to-long term.’