Uganda’s real estate industry is growing at a high rate. Many real estate developers are joining this industry and making huge returns because of the extremely high demand, especially in the urban areas of the country. According to the Uganda Ministry of Lands Housing and Urban Development’s statistics, over 2000 housing units are set up annually. During the third quarter of 2019, the national wide residential property price index rose by 3.25% (1.3% inflation-adjusted) according the Uganda Bureau of Statistics (UBOS) – pointing towards an upward trajectory in the marketability of real estate, in Uganda.
Figure 1 Kampala, Capital City. Credit Mato Press.
Residentials have over time proved to be one of the most profitable in the real estate business. This might be as a result of the ever-growing population especially in the capital city (Kampala). In Kampala, Central and Makindye, residential property prices surged by18.5% during the year to third quarter of 2019. The influx of many people from all over the world that come to Uganda for several reasons including leisure and economic opportunity has created a great demand for residential housing.
The preference of most city dwellers especially middle-income earners are rental apartments. Arthur Makembo, regional director, RE/MAX-Uganda, a real estate agency and consultancy firm says, “The good performance of this section [Residentials] will most likely result in an increase in demand for credit, including mortgages.” He also stated that the affordable housing segment will see the best performance, especially in demand for “starter” homes. That said, it is anticipated that formal housing market will continue to be concentrated in the Greater Kampala Area, and the neighboring districts of Mukono and Wakiso Districts. Makembo also argues that given the cost of the land and other factors of production and considering good urban planning principles, we should see an increase in densification in these areas-being the construction of multi-family rather than single family housing units.
Despite the shrinking strength of the Ugandan Shilling and inflation rates in Uganda, the growing price ranges, especially for residential houses in Kampala, Wakiso and Mukono present an opportunity for investment in real estate. The ever-increasing urban population fuels the demand for housing which makes investing in Uganda real estate ideal.