Described by Times Magazine as “the ultimate election year,” 2024 sees about half of the world’s voting-age population heading to the polls. This wave of political changes is already affecting, and will continue to influence, many countries, thereby impacting investment decisions. In its mid-year Luxury Outlook Report, Sotheby’s International Realty, assesses this electoral impact on the international property market. 

As Mauritius also goes through an electoral period, it would be wise to closely monitor the political developments in our key markets, such as France, the United Kingdom, and South Africa, among others, not to mention the United States elections, which will significantly impact the global economy.

In the United Kingdom, the latest general elections saw the UK Labour Party elected, with Sir Keir Starmer as Prime Minister. “Every election year the market typically softens. Uncertainty can create a wait-and-watch attitude, resulting in a market with temporarily subdued growth. However, an uncertain market can present good opportunities for those with an appetite for higher-risk investments, or those who take a longer-term view“, explains Claire Reynolds, Managing Partner, United Kingdom Sotheby’s International Realty, in the report.

With the British representing 7% of property buyers in Mauritius according to the Economic Development Board, can we expect repercussions from this change in government on the market? “The UK market, although stronger in recent times, does not impact us as much. The UHNWI from the UK is more of a lifestyle purchaser as opposed to looking for major fiscal advantages. As such, I do not believe the new Labour government will have a major impact on the number of Brits choosing Mauritius as a 2nd or 3rd home investment destination,” explains Timo Geldenhuys, Director of Mauritius Sotheby’s International Realty.

Aside from the United Kingdom, South Africans also went to the polls last May with similarly unsettling results. “ This is the first year since 1994 that the ruling African National Congress [ANC] party does not have an outright majority”, says Hein Pretorius, a real estate expert at Lew Geffen Sotheby’s International Realty in South Africa, in the report.

It is worth noting that South Africans represent 22% of foreign property buyers in Mauritius, and the coalition between the ANC and the Democratic Alliance (DA) could eventually bring a sense of stability in South Africa. “South Africa has always been a strong investor in the Mauritian economy and is a major contributor to the inflow of FDI in the real estate sector. South Africans purchase for different reasons, the main trigger being Permanent Residency and externalisation of ZAR into a foreign based asset. This will not change and we can expect the South African market to be consistent and perhaps even growing”, says Timo. 

Another priority market for Mauritian real estate is, of course, France, representing 42% of buyers nationwide according to the EDB. The elections in France surprised many with the left-wing coalition becoming the leading force in the French assembly. Here, the Mauritian real estate offering could become more attractive. “Upheaval in Francophone Europe, and specifically France, increases the attractiveness of Mauritius, and as such we have seen an increase in demand from key European markets. There are many French investors who fear a more penal fiscal regime for the wealthy in the short term and as such Mauritius should emphasise all the key benefits of investing and residing on the island, therefore driving our beautiful island as a viable alternative. The onus lies on both the government as well as the private sector to take advantage of the current situation,” he adds.

The results of the French legislative elections also pose a scenario of economic instability. According to the newspaper La Tribune, the rating agency Moody’s highlighted the “difficulties” to come in passing laws. The international agency, which currently assigns an Aa2 rating with a stable outlook, warns that the outlook could be downgraded to “negative” depending on the impact of political negotiations on the budgetary or growth trajectory. 

Under these circumstances, it would be relevant to monitor trends in France, especially emigration. “The recent elections, marked by unexpected results, have raised concerns about future economic stability. The proposed fiscal changes regularly mentioned in the press and their potential impacts on wealth worry a large part of the population. Faced with this uncertainty, many are considering investing or moving abroad. Mauritius then appears as an attractive destination. Its favourable climate, advantageous taxation, and permanent resident status offer a reassuring alternative for those looking to protect their assets and benefit from a stable environment. This trend highlights a growing desire among the French to diversify their investments and secure their future in an increasingly volatile global economic context,” explains Ninon Manaranche-Michel, Founder and Manager of Amanthée Patrimoine — a consulting firm based in France.

** This content was featured in the local newspaper – l’express