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Since the Mauritius government opened the doors to luxury real estate investment for foreigners in the early 2000s, the sector has thrived and become a symbol of exclusivity, contributing significantly to the island’s economy.
Thousands of tourists who visit Mauritius on vacation fall in love with island life and choose to make it their home, if not permanently, at least for a regular getaway, by buying property they can rent out.
Others are attracted by the perks of island living, such as political stability, safety, and an attractive tax regime. This tax regime, which includes a flat 15% income tax rate and no capital gains tax, makes Mauritius a tax-efficient investment destination. They, too, choose to join the multitude investing in luxury real estate in designated areas and developments, qualifying for permanent residency if they spend USD 375,000+.
It’s not just a boon for foreigners, though. Locals have seen the benefit of investing in island property and renting it out for extra income.
Over the past two decades, the Mauritian property market has evolved from a niche sector to a mainstay of the island’s economy, attracting local and international interest. One of the most compelling reasons for this is the high return on investment, which is uncontested and provides investors with confidence and reassurance.
Following the Economic Development Board’s recent property market report as of June 2024, this blog will provide insight into the sector’s historical development, property values, key areas, demographics, and investments that define today’s Mauritian real estate landscape. These investments include the Integrated Resort Scheme (IRS), Real Estate Scheme (RES), Property Development Scheme (PDS), and Smart City Scheme, each offering unique benefits and opportunities for investors.
The concept of luxury real estate in Mauritius took hold in the early 2000s when the government introduced residential schemes to promote the development of high-end properties that would attract foreign investors. The visionary move led to the sector not just evolving but flourishing, establishing Mauritius as one of the most sought-after destinations for those seeking the luxury lifestyle, a plan B, or both.
The introduction of development schemes, such as the Integrated Resort Scheme (IRS) in 2002, kickstarted the evolution of a thriving real estate sector. Since then, seven residential schemes have been established under specific regulations to attract foreign investment. This has enhanced Mauritius’s image as a premium destination for high-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals.
Foreign direct investment (FDI): The real estate sector has accounted for a substantial share of total FDI over time, particularly since 2015, reaching an all-time high of MUR37 billion in 2023. Of this, MUR14 billion came from residential schemes.
Sales volume: Post-Covid, people began searching for ways to improve their quality of life, which often meant slowing down and living closer to nature. As a result, in 2022 and 2023, sales in the Mauritian property market jumped significantly, with combined approved sales potential reaching MUR44 billion. Concluded sales set new records with MUR14 billion in 2022 and MUR23 billion in 2023.
Transaction value growth: Between 2011 and 2023, the number of transactions approved by the Economic Development Board (EDB) increased by 250% and 790% in value, from MUR2.5 billion to MUR22.4 billion.
Mauritius’s luxury property market is dotted across the island, with certain regions experiencing higher demand and development than others. However, the beauty of living on an island this small (2,040 square kilometres) is a weekend getaway is, at most, a 90-minute drive away. All areas will claim the best beaches. While some people make buying decisions based on proximity to those famous white sand shores, others go for the mountains, the sunsets sway some, while others get a bit of everything.
Investment in Mauritius’s northern and western regions accounts for 78% of the sales volume.
The North (Pamplemousses and Rivière du Rempart): 51% of all sales are concentrated in the northern region. It is a tourist hotspot, regarded as the most vibrant in terms of nightlife.
The West (Black River): The western coast, known for its spectacular sunsets and outdoor activities (beach and mountains), is another top destination, particularly for South African buyers.
The East (Flacq) and The South (Grand Port and Savanne): The eastern and southern regions are gaining popularity, especially among senior buyers from Switzerland and elsewhere. They appreciate the tranquillity and exclusivity of these areas.
The Mauritian property market offers various residential options, catering to different preferences and investment strategies, ensuring that every potential buyer’s needs are considered. Options include villas, apartments, duplexes, townhouses, penthouses, and serviced plots. Villas and apartments are the most popular, representing 80% of the market. Ground Plus Two apartments, which are multi-storey residences with two floors above ground level, are gaining favour, especially in the central region closer to the business district.
Average price by property type and price appreciation per square metre (2022-2023):
The Mauritian property market attracts buyers from different nationalities and age groups. The top nationalities investing in luxury real estate are French (42%), South African (22%), Mauritian (9%), and British (7%).
Adding weight to the island’s initial appeal as a retirement destination, the EDB report states that 61% of all buyers are above 50 and prefer villas. Those under 50 total 39% of all buyers and have more varied preferences.
Before COVID-19 (2020-2021), French buyers above 50 preferred the north while South Africans favoured the west coast. Swiss buyers chose the east, and Russians, typically below 50, chose property across the main regions.
Most buyers (69%) prefer individual ownership, while the remaining percentage (31%) is split across other structures, namely domestic companies, trusts, and Societe Civile.
Demand for Mauritian property continues to be driven by its premium lifestyle, safe environment, tax benefits and attractive investment opportunities. It is poised for ongoing growth and success, attracting a diverse and global demographic of buyers. Moreover, the ability to obtain permanent residency by investing USD375,000 is a major drawcard for expatriates. Real estate developers respond to this demand by offering various products, increasing supply, and, more recently, focusing on sustainable development and climate change initiatives to ensure the market’s long-term viability.
Mauritius remains a premier destination for those seeking an idyllic and secure place to live, work, and invest as the market evolves.