Algeria: quarter a million real-estates sold and purchased in 2012

Real-estate market in Algeria is experiencing unprecedented bloom with its record prices which are likely going up year after year due to speculation in free market.

Some believe that speculation is fuelled by money laundering while others consider it as an automatic result of economic and social development in Algeria. Trade exchanges in real-estate market reached quarter of a million deals making real-estate the largest investment field for private enterprises, employers and businessmen.

Real-estate business touches private properties and lands people obtained after the State had granted lands. They were sold in free markets for billions of dinars while the State granted its lands at symbolic prices, a few years ago.

The State granted more than half a million real-estates to private enterprises

The State started granting lands by virtue of the Law No 01-81 promulgated in February 1981. Different real-estates were sold at symbolic prices and villas and luxury apartments were bought in Algiers. The Finance Law 2001 stipulated new measures on the granting process as real-estates price went up.

According to the National Lands Administration, the State granted more than 460,400 real-estates between 1981 and 2000. They included collective, individual, housing, commercial, professional and handicraft properties.

Ahmed Hermel, a central director at the administration told Echorouk the government reviewed the lands price in 2003 by virtue of a decree. Municipality properties were excluded from the granting process and the law stipulated sale conditions. In the beginning, apartment buildings referential price was fixed at 18,000 DZ and it was reduced to 14,000 DZ. Yet, few people bought the State’s lands.

As for individual properties, granting price was determined accordingly to land price in free market. Luxury individual real-estates in affluent areas in Algiers were granted at 15 million centimes per square meter.

According to the same source, the number of real-estates which were granted by virtue of the new measures between 2003 and 2012 reached 53,847. Many people bought luxury real-estates at about 3 billion centimes and they sold them at more than 30 billion centimes or exploited them investments.

Real-estate market circulates more than 400 billion DZ annually

Mr. Hermel said 136,714 real-estate sale and purchasing deals were sealed in Algeria in 2011. In 2012, the number of real-estate transactions reached 224,277 valued at more than $4 billion.

According to sources, those figures may be far from reality because real prices are not declared during sale and purchasing transactions. They show that commercial transactions in real-estate market are increasing by more than 20,000 deals per year.