According to Uganda Bureau of Statistics (Ubos), Uganda currently has a deficit of 2.1 million housing units and is expected to reach three million by 2030. The deficit, data shows, will further expand to eight million units, of which 2.5 million will be in urban centres in two decades.
Part of the explanation for this is the country’s fast-growing population. At 3.3 per cent per year, Uganda’s population will stand at 75 million in the next 20 years according to a report (2017) by the United Nations Population Fund. Additionally, more than 70 per cent of the population is under the age of 30. According to the World Bank’s collection of development indicators of 2018, Uganda’s urban population will stand at around 20 million in 2040, from just over 10 million people (24.4 per cent) in 2018.
All of this might present serious challenges and immense pressure on the country’s resources but it also presents immense opportunities. The real estate sector is one of those areas where opportunities to innovate and advance in business are hidden in plain sight. Opportunities for developers, particularly in the affordable urban housing segment are immense.
Stagnating rental market
Having said that, the rental market in 2019 continued being profitable as has been the case for over two decades. And going by the factors pushing the sector (some of which are mentioned above), it would take a catastrophe of Biblical proportions to change the trends.
The country’s rental market is huge. Most people, especially in the urban centres, can neither afford to build a house of their own nor afford to buy property. The only option is to rent, whether it is residential or business spaces.
According to Centre for Affordable House Finance in Africa, more than 70 per cent of households in Kampala rent their dwellings and over one-fifth of all households countrywide live in rented homes.
According to real estate consultants Knight Frank’s Kampala Market Update, occupancy rates in prime residential suburbs of Nakasero, Kololo, Naguru, Mbuya and Bugolobi in Kampala, increased to 78 per cent in the first half of 2019, up from 69 per cent in the same period in 2018. The figures took a downturn in the 2nd half though. Occupancy in the above-named areas dropped to 72 per cent down from 81 per cent in the same period in 2018.
There was a year on year 8.5 per cent increase in […]