In recent months we’ve talked about how the skyrocketing middle class in China and India bodes well for those wise enough to see how this new reality of demographics offers a huge profit potential for income property investors anywhere they happen to be in the world. The cool part is you don’t have to go to Africa or even be able to locate it on a map, though it would be sort of embarrassing if you couldn’t. All you have to do to invest in Africa is recognize that the continent is set to take off as the next urban population bomb and adjust your portfolio accordingly.
First, let’s take a look at population projections. The BBC reports that the number of people living in African cities will triple over the next 40 years. By 2050, 60% of Africans will be city dwellers, which will be a shift of epic proportions to this predominantly rural continent. In fact, urbanization is happening faster in Africa than anywhere else in the world right now. It’s a story that has replicated itself for time immemorial. When people want to improve their lot in life, they head for the city.
How does this help the average American who still doesn’t see the exact connection between a healthy portfolio and our suggestion to invest in Africa? It goes like this. As these millions of people pour into African cities in the coming decades, what are they going to need? Houses, houses, and more houses! Nowhere else in the world is there a higher rate of slums and substandard housing than in sub-Saharan Africa, a fact that will be forced to change as the population shifts. Some might think this demographic shift will simply expand the slums and help no one. That’s not what happened in northern Africa, which has already undergone this population upheaval and saw the number of slums in major cities reduced by half.
The salient point to all this is that an influx of people into cities applies upward pressure to the basic commodities that are used in house construction. A ripple effect spreads around the world and property prices rise everywhere. If you happen to be one of the forward thinking investors who see this coming, you’ll buy income producing properties right now and ride the rocket upward as they appreciate in value in the coming years.
That’s how to invest in Africa without ever leaving Peoria, Illinois.
The Creating Wealth Team
Flickr / airpanther
