Expatriates having lived in Mauritius for three years can now buy property in Mauritius. This is no doubt welcoming news for some, but this measure spells bad news for Mauritians living full time on the island.

The price of housing in coastal regions is spiralling out of control. Demand is so big that many projects are sold out before breaking ground. A measly apartment, with a sparse common garden and a swimming pool, can cost anywhere between Rs 5 to 6 million. And I am not even talking about IRS properties. Who, on earth therefore earning a salary in Mauritius, can afford a residence for that price? Herein lies the rub. There is a limited group of people with deep pockets lining up to buy these properties.

First, we have Mauritians living abroad. They are nearing, or preparing for, retirement and want a place in the sun. Paid in foreign currencies and having access to cheap credit, they are gobbling up these properties. Developers calculate their asking price based on the repayment capacity of an average middle-class family living in the First World. And with the rupee fast depreciating against major currencies, it costs Mauritian expats the same money now to buy real estate than it did a couple of years ago and that, even after the price in Mauritian Rupees has gone up by some 25%. Many developers actually hold information sessions abroad targeting Mauritian expats; some even have full-time marketing and real-estate agents and bankers working on their behalf.

Next, we have wealthy local speculators who buy these properties before excavation has even started and flip them over after the building is ready to move in, thereby making a tidy profit. Since they are in no hurry to sell, and without a mortgage cost, they usually hang on to the asking price until somebody with euros shows up. This can only up tick the price for subsequent properties that go on the market since the last selling price is usually used as benchmark to gauge property values.

Now, we must add another category of people: foreign expats with three years of service in the country. Expats working in Mauritius do not earn their salaries in rupees; they are paid in foreign currencies and at a salary dictated by the pay rate for their positions in their country of origin. A middle-management expat can earn anywhere between Rs 200,000 and Rs 300,000 a month. That is a very conservative figure. After their three years, they can easily afford their own beach property. And so demand for the best places in the sun is not coming from locals but from outsiders. It?s no surprise then that they will pay according to their inflated income. For as long as there are people willing to pay what are otherwise astronomical property prices for locals but relatively cheaper for foreigners with a higher income, promoters will keep jacking up the price for bigger profits.

<I>Could this be a precursor to allowing foreigners to buy unconditionally anything for sale in this country? Mauritius is on its way to be another Bahamas and Bermuda. </I>

Could this be a precursor to allowing foreigners to buy unconditionally anything for sale in this country? Mauritius is on its way to be another Bahamas and Bermuda. The best place will be off limits to Mauritians who live on the island all year round. Soon our Reunion neighbours, flushed with strong euros, will be flocking to the coast snatching up coastal properties. And it will still be cheaper for them than an apartment in their own country.

The government is not really safeguarding the interests of local Mauritians at all. While I recko that there are many countries that grant foreigners the right to own property, we should remember that these countries are huge, have vast land to spare - in addition to their real estate price already acting as a buffer - and have better social safety nets to protect the have-nots. We, on the other hand, have a small country with limited land but a huge population.

The government?s decision to democratise the economy is praiseworthy, though it seems less concerned with democratising other aspects of life in the country, despite the PM?s ho-hum speech on this topic in Parliament on June 26, 2007. It should be condemned for planting the seeds of what will surely be yet another confirmation of a layered society with one group on the coast, another near the coast, and the rest ? the majority ? pushed back towards the plateau, deprived of the only blessing and therapeutic beauty gifted to them.

If nothing is done to counter this trend ? and there are many measures to make it more reasonably accessible to many ? we will be left with our favourite pastime, that of watching others enjoying what should be ours to enjoy. Alas, those who decided it ought to be that way will either not be here or will be within their gated compound looking outside on those looking in. And I am afraid this is a recipe for a social catastrophe in the making.

Saoud BACCUS [email protected]