Somali real estate boom gives Mogadishu residents money headaches. Somalia’s Mogadishu – Mumtaz Ahmed sounds and appears overburdened. She has been looking for a rental flat in Mogadishu, the capital of Somalia, for her small family of three for the past three weeks. The few available homes are either overpriced or require a sizable upfront deposit from buyers.
As she waited in the waiting area of an estate agency in the city’s Waberi district, the mother of one told Al Jazeera, “I’m looking for two to three-bedroom apartments in this region and it is proving impossible.”
Somali real estate boom gives Mogadishu residents money headaches. Even making a deposit won’t always guarantee you the property you want. As further potential renters filter into the cramped waiting room, Mumtaz continues, “Mogadishu of today is not Mogadishu of [a] few years ago.
With a budget of $350 a month, Mumtaz is not too hopeful. “Three or four years ago, I will have found a four-bedroom villa in the nicest area of the city with that money,” she said.
Since August 2011, when the al-Qaeda-linked armed group al-Shabab was pushed out of the seaside city, the Somali capital has been enjoying the relative calm. The city’s skyline is changing fast with brand new multistorey apartment buildings replacing the bullet-scarred houses.
Sounds of hammers and cement mixers are a common feature for residents of the city. “If you look anywhere in Mogadishu, you will see they are building new apartments. But that has not made it cheaper or affordable,” Mumtaz said.
With the armed group out of sight and a shaky political truce holding between the warring elites, people are flocking back into the city.
Properties are snapped up even before they come onto the open market. Some residents are even inking multi-year agreements to secure properties in their favoured part of the city.
Ibaar Osman Ibrahim woke up early to make the rounds at the different estate agencies in downtown Mogadishu. The 27-year-old electrical engineer is hoping to find a suitable villa to rent.
“I’m looking for a four-bedroom villa ideally in Waberi district,” Ibaar told Al Jazeera. “This area is even more expensive than other areas because it is favoured by government employees. It is safer for them than many other parts of the city.”
“I will be very lucky if I find something for $400 a month. Every month, the asking price is going up. Our salaries have hardly gone up which makes it difficult,” he added.
The rent excludes utility bills with the East African country having one of the most expensive electricity tariffs in the world.
“Those of us who are lucky to have a good paying job, we spend 60 percent of our salary on rent and another 20 percent on bills,” he said.
Real estate developers are especially happy with the booming market.
Ismail Ali Toohow saw an opportunity in the market two years ago. He now owns and manages Kiro Sheeg real estate agency, with multiple offices in the city.
“In this office, we see a minimum of 50 people seeking properties to rent,” the father-of-three told Al Jazeera. “There is huge demand. Asking price has gone up by more than a third in the last two years even with the pandemic.”
For every tenant he finds a property, he charges them a $100 fee.
“Sometimes people are willing to pay you money just so that you call them if and when a property comes onto the market. They want to beat the competition. Going into this business is the best decision I have made,” the 30-year-old said smiling.
Investment by the country’s sizeable diaspora has been flowing back pushing prices even higher. They prefer to buy land and build apartments.
Off Maka al-Mukarama road, the city’s main thoroughfare, a group of young men are busy typing away and taking orders on the phone in a two-room office equipped with sleek computers. They work for Bile Home Repairs and Construction Services, one of the leading construction companies in the city.
“Most of our clients are diaspora and business people,” Bile Mohamud Dhoore, its CEO, told Al Jazeera.
“Every month we break ground on at least seven properties. In 2019, we used to do one, if we were very lucky may be two properties. For most of our clients, it is purely for investment purpose. There is confidence in the market at the moment,” Bile, 42, added.
But the demand cannot keep up with the supply, he said.