The Future of Real Estate in Uganda
Whether a Ugandan citizen or not, real estate in Uganda in terms of owning a piece of land or property remains a dream until you think you are ready to buy one. Then you realize you have a million questions unanswered.
So you begin questioning: What is the future of real estate in Uganda? What is the most profitable real estate investment? What is the least amount I can invest in real estate? Is investing in real estate in Uganda profitable?
All of these questions are valid. You are on the right track. And who wouldn’t want to establish the worth of their investment? I would ask the same questions if I were you.
You may know that your real estate profits depend on various variations. And that’s why you want to understand the future of real estate.
That said, this article explores the state of real estate, trends, and implications in revolutionizing the real estate sector in Uganda. You will also discover a favorable plot for sale in Mukono, one of the fastest-growing regions in Uganda.
Let’s get the details!
The State of Real Estate in Uganda
The real estate market in Uganda was booming until COVID 19 hit, painfully disrupting property owners, buyers, and buyers. The economy was shaken, and almost no hope for profits was left for real estate investors.
The last quarter of 2022 proved otherwise, with the market reviving and retaking its roots.
Currently, the real estate market in Uganda is spurring the curiosity of innumerable investors, as it presents multiple ways to turn land into high-profit developments.
The residential market continues to top the list, with the market value estimated to be USD 305.9 Billion in 2023. That’s an insane difference compared to the commercial real estate market (USD 32.73 Billion).
And there’s a wide range of developments that are contributing to the soaring market growth. So, what factors contribute to the market’s growth, and what are the implications?
Factors Contributing to Real Estate Market Growth in Uganda [Trends+ Implications]
As Uganda’s economy and urbanization continue to take shape, various trends have emerged, propelling the growth of the market.
Let’s look at the top 10 real estate trends in Uganda and their implications in shaping the future market.
1. The demand for housing in urban areas
Uganda is quickly recovering from the adverse effects of the pandemic, and the economy is stabilizing.
Consequently, those who had moved to rural areas seeking cheaper housing and trying to cope with the rising cost of living are returning to the city centers.
The growing population in Uganda also drives many people to move to the city for jobs and business opportunities.
Following the economic revolution, Kampala and the surrounding districts, including Mukono and Wakiso, are experiencing a population rise.
The implication
- Increasing demand for residential and commercial real estate
- Rising property values and rental rates
- Opportunities for investors and property developers
2. The rise of affordable housing initiatives
The demand for cheap residential housing has been rising above the available properties. The Ugandan government is actively collaborating with the private sector players to provide affordable housing in Uganda in response to the shortage.
Such initiatives have promoted the launch of projects such as the 40-unit Citadel Apartments in Mbuya through the National Social Security Funds (NSSF).
Thanks to government support, affordable yet decent houses are also available in the Nansana and Bweyogerere regions.
The implication
- Improved accessibility to housing for low and middle-income earners in Uganda
- Increasing real estate investment opportunities
- Underutilized land is finally being utilized
3. A growing focus on accessibility
The government has invested in infrastructure development, including bridges, road networks, and public transportation systems.
Some of the earlier inaccessible regions have now become investors’ dream properties. For instance, developing the Northern Bypass Kampala and the Entebbe Expressway have opened new real estate hubs such as Bwebajja and Kajjansi.
The implication
- Ease of accessing previously under-served areas
- Increased property value and land appreciation
- Opportunities for multi-use plots of land in the sub-urban regions
4. Real estate digital marketing
Technology is critical in Uganda’s real estate development, marketing, and transactions. Real estate professionals and buyers are embracing digital platforms, virtual tours, property listings, and online property transactions.
Realtors can accurately and conveniently update available properties for sale online with videos and photos taken from different dimensions. Prospective investors can also view the listed properties from anywhere in the world and transact online.
These digital platforms have improved the transparency, convenience, and efficiency of real estate investing
The implication
- The elimination of multiple site visits
- Enhanced property visibility and broader market reach
- A growing demand for real estate development projects
5. The rise of short-term rentals and Airbnb
As discussed earlier in one of our guides, short-term rentals and Airbnb are various ways to invest in real estate in Uganda.
Uganda’s flourishing tourism sector fuels this trend as investors seek to provide accommodation for tourists.
Regions such as Bwindi Impenetrable National Park, Queen Elizabeth National Park, and Jinja are fast developing, with the construction of Airbnb, vacation homes, and hotels.
The implication
- Diversified real estate investment options and jobs
- Increased potential profits for investors
- Increased real estate market growth
6. A shift to sustainable and environmentally friendly real estate
Real estate buyers and professionals are growing conscious of their environmental responsibility in development. This includes developments prioritizing waste reduction, energy efficiency, and sustainable construction practices.
The adoption of green building designs and technologies is gaining prominence within Entebbe and select regions around Kampala.
Besides, building committees in five districts, including Mukono, Arua, Entebbe, and Gulu, have been trained on green building as part of their capacity-building initiatives.
The implication
- Reduced carbon emissions and energy-saving plans for property owners
- Potentially attracting environmentally conscious investors and tenants
- Compliance with the evolving green building requirements
7. Diverse ways of funding real estate in Uganda
Mortgages have been a predominant financing option for investors in Uganda. Financial institutions in Uganda, including NCBA, Stanbic, and I&M, offer home loans and a wide range of mortgages, increasing access to real estate financing.
Most investors are realizing these opportunities and using them to launch new real estate projects.
Regions such as Lubowa and Kirwa are at the forefront of this trend, with a soaring rise in real estate developments thanks to residential mortgages.
Real estate crowdfunding platforms such as Afroteller are also on the rise, providing funding to investors for their real estate developments.
The Implication
- Increased rate of home-ownership
- Increased affordability for prospective real estate investors
- More developed land
8. Land buying process reforms and digitalization
Buying land in Uganda has long been a challenge to many investors, requiring them to pay multiple visits while land hunting.
Even after the visits, it was challenging to ascertain the security of a prospective plot due to title verification challenges and land disputes.
However, the trend is changing to a more secure, transparent, and reliable registration and verification process.
Recent efforts to digitize land records and streamline Uganda’s land registration and title transfer process address these issues, particularly in Masaka and Mukono. It’s now easier to obtain land in these regions than ever before.
The implication
- Enhanced land security for real estate investors
- Reduced land disputes and issues
- An increased number of verified properties for investors
9. Satellite construction
Satellite construction is a fast-growing real estate trend that has risen in response to urban congestion and limited housing.
They are planned urban communities on the outskirts of city centers (satellite cities) designed to offer self-contained housing.
These satellite cities have proven an ideal solution for de-congesting city centers and providing affordable housing to cater to the growing population in major cities.
The concept redefines urban planning, offering various developments, including opportunities for residential and commercial rentals, office spaces, and recreational facilities.
The implication
- Fast-paced real estate developments in regions surrounding city centers
- Increased land value for sub-urban areas with the potential to grow
- Increased business opportunities for real estate in Uganda
Challenges Facing Real Estate Growth in Uganda
Uganda has a growing population of over 42 Million, with 17.5% of the population in urban areas. The urbanization rate is also high, currently at 5.6%.
Such a growing population poses one significant challenge: housing shortage. There is a housing deficit of 2.4 million units generally, with 2.1 million units needed in urban areas and around 1.3 million in rural areas.
Even worse, the better part of the urban population is low-middle income. These people have zero to low-paying jobs, making housing affordability a hassle as the housing rates in the urban areas are pretty high.
But why is there a housing crisis when land is available for development? There are several factors contributing to the housing crisis in Uganda.
In urban areas, private developers provide housing to reap significant profits. As such, they develop houses designed for the high-income population in the city centers, which is why the low-income population finds the rates challenging.
Housing supply for the low-income groups is mainly supplied by homeowners using their savings and home loans to fund the projects. Such a source of funding limits the potential of investors to bridge the housing gap on their own.
Those looking forward to owning land are also challenged. While the appreciating land rates may seem a luxurious opportunity for investors, they also lack funding to buy and develop the available land.
Besides, the cost of construction materials is insanely high, further escalating the funding issue.
Acing the Real Estate Challenges in Uganda
Given the trends discussed in this article and the real-estate sector’s challenges, how can the housing crisis be alleviated?
As discussed, the government is at the forefront of providing affordable housing within the outskirts of city centers and the sub-urban regions of Uganda. This includes satellite construction, cheaper housing initiatives, and multiple funding sources trends (trend 9, 7, 2)
The government’s continued support of affordable housing initiatives is expected to decrease the housing deficit significantly.
Additionally, alternative real-estate development opportunities, including Airbnb and short-rentals, are on the rise. These developments are opening job opportunities and reducing the burden of high rental rates.
The government’s focus on infrastructure development and accessibility (trend 3) reduces the impact of congestion in urban areas. This is because investors can potentially invest in the fast-growing rural areas, realizing more jobs and business opportunities the vast majority seek in the city centers.
Furthermore, in developed rural areas, the youth (a significant part of the urban population) can pursue remote opportunities without moving into the city centers.
What is the Future of Real Estate in Uganda?
Merging the trends and challenges, it makes sense Uganda’s real estate market is projected to grow at a 5.23% CAGR.
Despite the challenges discussed, Real estate in Uganda has endless opportunities for real estate investors.
Here are the two key ways investors can ace the future of real-estate in Uganda:
#1 Digital marketing and transactions
First, adopting digital technology in real estate development presents an opportunity to connect and transact with potential buyers online. With virtual reality, potential buyers can view available properties in detail without paying a site visit.
Additionally, with online property listings, buyers can compare prices and analyze varied properties available for sale to identify the one best suited for their needs.
This is an essential milestone as even Ugandan citizens abroad can potentially invest in their home country without a hassle. The technological revolution also offers a broader market reach, attracting investors from anywhere in the world.
#2 Residential and commercial real estate
Another opportunity for investors lies in offering affordable housing solutions in the suburban regions. There is a vast amount of land in these regions which is underutilized.
Considering the government’s continued investment in developing infrastructure, cheaper housing would translate to high profits as more businesses sprout in the suburban regions.
Furthermore, landowners are offering these lands for sale at affordable prices, making it an excellent opportunity to invest now before the land rates appreciate.
Such an opportunity to grab includes the Mukono Kabembe Estate, near the Kabembe trading center.
In a nutshell, the future of real estate in Uganda is promising, with innumerable opportunities for property buyers and sellers.
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