How could investing in Mauritius get advantages from Covid-19?

There just might be a silver lining for some smart property investors in these times of the Covid-19 pandemic. Investing in Mauritius at advantages of a record low repo rate presents this window of opportunity amidst the pandemic.

The Monetary Policy Committee (MPC) of the Bank of Mauritius cut this benchmark rate to 1.85% in April 2020. The MPC maintained this level in July as amongst the government’s measures to counter the adverse economic impact of Covid-19. The rock-bottom rate notably raises the possibility of a lower mortgage and a handsome return on a home resale later.

Leverage your investment through a mortgage

A real estate investment leveraged on a mortgage is possible through the Property Development Scheme (PDS).  As advantageous, investors can buy PDS residences on installment in developments yet on the planning stage or under construction. The programme also allows resale of  PDS properties at no minimum price.

The interest rate for mortgages denominated in Mauritian rupees is based on the BoM’s repo rate. Mortgages in rupees go at an annual interest rate of between the 4.8% and 5.75% range. Given the recent record-low repo rate, the interest rate is likely to trend towards the low end of this range.

Mauritian mortgages can likewise be denominated in euros or US dollars. For euro-denominated loans the, the interest rate ranges from 3% to 5 %. Rates of between 5% and 7%, on the other hand, are charged on US dollar-denominated mortgages.

The rates of Euro- and US dollar-denominated loans are based on the London Interbank Offered Rate (LIBOR). This rate is also on a current downtrend because of the pandemic. Thus, this likewise puts downward pressure on the mortgage interest rates tied to LIBOR.

Strong property market fundamentals

Real estate tied to PDS projects hence now appear an opportunity worth exploring. Financing of a purchase under this programme currently looks manageable. Moreover, future prospects for property value appreciation loom bright once the cloud of the pandemic lifts.

PDS properties, like those of 2Futures, are high-end developments in prime island locations. Historically, the residences here could generate 40–50% price appreciation if the resale timing is right. The fundamentals of the island’s property market and the country’s economy, moreover, remain strong. That Mauritius was amongst the first countries to contain the Covid-19 virus is also a plus factor.

The advantages of the PDS can proceed with dispatch at 2Futures. We have expert sales consultants who not only can walk you through the purchase process. Our team can also extend sound advice should you consider a resale later.

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