UGANDA (Commonwealth Union)_ There is no doubt that the value of real estate increases over time. However, Ugandan real estate appears to be appreciating at a quicker rate than other economies. Why is Uganda’s real estate industry expanding so quickly?
The solution comes in the steady and natural increase in rural-to-urban migration caused by economic development strategies and industrial investment being centred in urban areas, particularly Kampala. As the population of these urban areas grows, land previously used for agricultural purposes is reclaimed for residential use. Since this type of development occurs naturally, the majority of these residential communities are unplanned, underserved, and of poor quality. These are the locations that serve the majority of low-income city people.
In contrast, well-serviced residential regions are more expensive than peri-urban areas.
The Ugandan real estate business is divided into two distinct yet active markets: formal and informal. Land is registered and sales are legally recorded in the formal market, whereas land can be purchased and sold in the informal market without being publicly recorded.
Slums are thought to house approximately 85 percent of Kampala’s population of almost 1.8 million people. This tendency is expected to continue unless a concerted effort is made to redress imbalances and provide suitable sites for new homes for low and middle-income households. Stakeholders criticise current limits such as land tenure systems, land policy, urban planning standards and laws, as well as their enforcement, and land registration systems, among others.
The formal land market does not function as well as it should; for example, artificial market distortions are common, resulting in an increase in land values in well-located urban areas to the point where housing for low- and moderate-income families simply cannot be built profitably by private investors. Currently, only the Land Registry at the Ministry of Lands, Housing, and Urban Development provides access to the land and property information system. Individual land and real estate firms maintain their own databases but do not readily share information.
On account of these complications, real estate investors rely on land brokers with extensive industry experience to identify and secure development land. Brokers range from established formal real estate organisations to lone individuals who specialise in properties in their surrounding areas and understand how the system works.
