Official Tunisia.com Blog

One of the most popular discussions on the forum at the moment and in my house also is the subject of house buying.

http://forum.tunisia.com/tunisian-property-forum/

This discussion has also shown up some of the differences between the thought processes of my family and my wife's family.

I come from Norwich a small city in the East of the UK which to be fair is a very nice safe comfortable city i love it there and aside from being a little bit of a career backwater its not a bad place to live.

I bought a house there for about 140,000 pounds and sold it last year for over 200,000 having owned the house for little over a year. I am not one to say look at me what a lot of money I made actually I feel the opposite I did not want to sell the house but the prices became so stupid i thought better to get rid as i remember as a child my parents loosing money on a house in the last downturn. I also hate the average guy not being able to buy the average house.

Having sold I assumed that I would be able to get a nice priced house here in Tunisia given the strong pound and to put it bluntly you earn a hell of a lot more working in the UK. However surprisingly i have found that houses in the nice areas even in Bizerte (tunis is x2 expensive) are crazier when you compare income levels. I have also come to the conclusion Tunisians are even more addicted to property than folks from the UK.

My wife is pathologically pressuring to buy a house for the following reasons

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• she wants a house no matter what the cost (to me :-))



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• houses never go down in Tunisia, never apparently



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• They will become even more expensive.



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• I am not a real man unless I buy an expensive house because successful people never rent.



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So naturally I have given it some thought but I have the following issues.

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• A nice house of a suitable standard in a suitable area 300-350,000 dinars (152,000+ GBP)



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• If i wanted to rent the house (say relocation) I would get about 500-800 dinars per month (304 GBP)



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This means to buy my wifes excellent investment would mean that I would enjoy a return of 3% half of what i currently get on the money in the bank.

Another popular way of getting a cheaper house in Tunisia is self build but this has the following issues.

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• Planning permission



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• Getting good builders (god knows there are lots of poor workmen in Tunisia if they come at all)



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• Other monstrous houses cropping up around you.



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This on paper however looks like the most business savy method of home ownership as long as you get a good price for the land which at the moment is the problem as land in bizerte corniche is now going for 250-400 dinars a meter.

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• 1000m for a nice sized house = 300,000 dinars @300pm 500m (min for nice house) 150,000 dinars or 65,000GBP



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• 70-100,000 dinars for a house to be built (30-40,000 GBP)



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So if you build yourself your looking at a saving of about 50,000 dinars but with all the extra hassle and a house that once rented will give you about 4-5% return.

I suppose it boils down to if you feel prices will go up or come down in Tunisia which I cannot see in dinars but Coyote in the forum pointed out something very important that the dinar devalues 5% each year and if you look at contracts it seems that level of inflation is built into the system. This means that if you buy your house for 100,000 dinars it will need to go up in price each year by 5% just to retain the same value as the hard currency that you bought it with potentially.

I also personally am concerned with how people buy these houses the exact same feelings i had when the market went down in the UK but since this has never happened in Tunisia before i think its an argument brewing with the other half.

At the moment I look at plots of terrain and hope to get a bargain for cash if not I refuse to be pressured as I will simply use the interest on 50k of my savings to rent a 350,000 dinar house and the interest on the rest to kick back and relax and unfortunately I cannot find a more compelling solution that makes any financial sense at all!

If you love ranting about house prices either bull or bear please come to the forum and share your point of view

Forum property discussion