BY OUR REPORTER
KAMPALA – Lack of a real estate regulatory authority to oversee, regulate and license the activities of the real estate developers, high interest rates and severe taxes have hampered the growth of the real estate sector.
Initially estimated to have grown by 5.6 percent in 2016/17, the sector continues to witness lack of professionalism among the real estate agents, which has resulted into developers developing anywhere without proper coordinated planning.
Addressing the media during a press conference at Private Sector Foundation Uganda on Thursday October 24, the Association of Real Estate Agents (AREA) Uganda President, Shirley Kongai, said lack of the regulatory body has made real estate sector players to carry out their businesses in any manner they want.
“AREA-Uganda has continued to note with concern the lack of legislation and enforcement of the various laws that affect the sector. The same has driven speculation in real estate property prices, land conflict, fraud and unplanned development across the country,” Kongai said.
“It is important to note that the cost of construction remains very high due to several factors, which include high cost of capital, limited infrastructure support to the developers, numerous taxes and high cost land and building materials”
Kongai said the issues will be deliberated upon during AREA’s upcoming 7th annual real estate investment conferences, which will be held from November 20-22 at the Speke Resort Munyonyo.
The AREA-Uganda board member and chairman disciplinary committee, Lazarus Mugabi, stated that lack of regulation has led to misuse of land that could have otherwise, been put to better use.
“We are not using our land efficiently. If we were, then you would not find scenarios when somebody can put up a latrine in front of your sitting room or kitchen. So, the earlier we are organized the better because we can even access funds from institutions like NSSF” Mugabi said.
While giving the highlights of the annual conference expected to be addressed by President Yoweri Museveni, Julius Sebbale, the AREA board member, said the conference will launch the AREA-Uganda members data base that will enable their members review their performance and register from wherever they are.
Sebbale, said the data base will include a quick response code
The real estate sector remains one of the key drivers of Uganda’s economic transformation, creating thousands of direct and indirect jobs, attracting local and international investors. The sector has exponentially been growing at a rate of 6% over the last years and has had a great contribution to national GDP and employment of the country. It is estimated that the sector contributes between 13-15 percent of Uganda’s GDP.
But despite the growth and its contribution, Uganda is experiencing increasing housing demand particularly in the urban areas. The real estate market in Uganda is sufficiently advanced to significantly benefit from interventions that will help streamline and make the market more efficient.
Statistics show that housing has contributed an estimated average of 5 percent of GDP to Uganda’s economy over the last decade.
According to the Uganda National Housing Policy, Uganda has about 7.3 million households living in 6.2 million housing units with an average household size of about 5 persons. The national occupation density is estimated at 1.1 household per housing unit, giving a total backlog of 710,000 housing units. There is also an estimated backlog of 900,000 housing units as a result of sub standard houses and structures, which were never meant for human habitation.
Out of a total backlog of 1.6 million housing units, about 210,000 units are in urban areas while close to 1.4 million (1.395.000) units are in rural areas.
The annual need for new housing for the entire country is estimated at 200,000 housing units of which 135,000 are in rural and 65,000 in urban areas resulting from the population growth of 3.2 percent and 5.1 percent urbanization rate. The estimated construction rate of reasonably good houses is estimated at 40,000 housing units in the rural areas and 20,000 in urban areas.
This creates a deficit of 140,000 houses nationally of which 95,000 are in rural while 45,000 are in urban areas. The backlog does not include the backlog of 1,600,000 housing units carried forward.
Founded in 2008, the Association of Real Estate Agents of Uganda (AREA-U) is a professional Association of Real Estate Agents, Property Managers, developers and related real estate practitioners in Uganda. With over 300 Individual and 200 Corporate members, AREA-U’s mandate is to professionalize the real estate sector in Uganda as well as to create awareness of its benefits as an engine for economic growth.