One of the sectors that have attracted real interest lately is the real estate sector. It has in turn created a housing boom in Uganda. The housing sector has experienced a record growth over the past decade; current figures indicate the growth averaged 7% over the past five years. The promising statistics, however statistics show that the desired “boom” is not in place as the demand for housing alone is not enough
“It is true the housing sector has experienced record growth in response to the rising need for proper housing and this growth owes to a drastic rise in people’s standard of living.
There is an increment in gross domestic product (GDP) and income per capita,” says Anatoli Kamugisha of Akright housing project.
He says the entry of several banks into the housing finance market has made people feel more compelled to set aside finances to buy real estate.Anatoli Kamugisha says the boom has pulled many real estate developers into committing huge financial resources to this sector, which is why mortgage financing has greatly taken off.
“Prior to the entry of new players, mortgage financing was dominated by Housing Finance Company and dfcu. However, other banks have broken into the niche. They include Standard Chartered Bank, Barclays and Stanbic Banks. Their interest ranges between 16-18% with terms up to 20 years,” he says.
As a player in the real estate sector, he says there is need for the Government to add incentives that will make it attractive for individuals to own property.
He notes that in the 2007/08 national budget, Value Added Tax on residential properties was reduced from 18% to 5% making the major players like the National Housing reduce prices of their property.
He notes that the belief by everyone that they should construct in Kampala has led to poorly erected structures. This has been compounded by the lack of a housing and urbanization policy which can regulate the housing units being set up. He adds that all the poorly erected buildings in Kampala have approved plans.
“This means that they are approved by the chief town planner, chief town engineer, architects and surveyors. All these offices need to be streamlined if we are to have sanity in the city,” he argues.
He also notes that the Ministry of Works has not moved to regulate the sector thus creating room for unscrupulous business real agents who have defrauded people and undermined the confidence in the housing market.
