Govt to introduce guidelines to control property prices
Posted Thursday, July 31 2014 at 01:00
Problem. Country is facing a deficit of 1.6 million housing units which is annually growing at a rate of 160,000.
In an attempt to shield the unsuspecting clients from being cheated by some crafty property agents, government will develop guidelines that industry players will refer to in determining prices of properties, a senior government official has disclosed.
The Director of Housing ministry of Lands, Ms Agnes Kadama Kalibala, told Daily Monitor yesterday that the guidelines will arrest the ‘senseless’ prices that most properties are being sold at.
She said: “We are trying to have the Association of Real Estate Agents (AREA) empowered so that together we can come up with guidelines that will ensure that properties are sold at reasonable prices.”
She continued: “As we speak now there is no control on the property prices, that is why you hear of those cases—exaggerated prices for properties.”
At a breakfast meeting organised by Standard Chartered Bank with the AREA members yesterday, it emerged that clients are being ripped off by unscrupulous real estate agents who increase the prices of properties by over 70 per cent on the basis of speculation.
“The industry players (real estate agents) have been cheating clients and each other, causing confusion and all sorts of problems in the industry,” the former AREA president, Mr Nicholas Arinaitwe, who represented the current president, said.
He continued: “The banks are also to blame for this because they provide funds for these kinds of ventures without doing due diligence, explaining the kind of problems the industry is facing—crazy prices for properties.”
“How can property that is supposed to cost Shs100 million be sold at either Shs200 million or even Shs1 billion? This happens because the property agents raise the prices at their convenience,” Mr Arinaitwe said.
high bank rates on mortgage facilities
According to former AREA president Nicholas Arinaitwe, the bank rates are high on mortgage facilities because the property agents have made it a high risk venture. However, he reckons that such practices are getting fewer because of the attempts by the association to reign in on such tendencies. He said AREA members are more professional and avoid such ridiculous transactions which impact on the growth of the industry, and appealed to the public to only deal with AREA certified members only.