The role of real estate in providing affordable accommodation

My colleague and I were among the mindless Ugandans who gaped at the fliers of housing companies at the fourth Homes and Property Expo earlier this month, and straight away acted like we could afford them at that minute. The two of us did not have a single penny in our pockets for lunch or even a cold drink to relieve us on that scorching afternoon.

The expo was designed to inform Ugandans that besides the housing options and technologies they know, affordable housing exists. With the alarming need for accommodation to house the ever increasing population of two million people per year, and Uganda’s housing deficit that now stands at 2.7m units, a number of real estate developers have come on board to provide affordable housing for the middle income groups, erasing the old notion that people who stay in estates are of a ‘high class’.

Currently, Uganda has about one million permanent housing units. Real estate developers have, according to the state minister for Lands and housing, Dr Chris Baryomunsi, played a big role in providing affordable housing, a move that rhymes with the theme of the national housing policy ‘access to quality and affordable housing’.

Housing is deemed affordable to middle income groups or people who earn between four to 20 dollars a day according to the World Bank. Rent for housing deemed affordable is not meant to exceed 40 per cent of the household’s gross income. Dr Baryomunsi notes that the housing ministry will support real estate developers to provide housing for civil servants as well.

During the expo, most housing estates such as Impala housing estate, Southgate properties, Waves Affordable Housing, among others, showcased their offers which were quite affordable for a middle income earner. A new real estates company Homex was launched as well.

Perez Freeman Mbazira, sales manager of Merewood Yankee Ltd, says developers provide housing units in time and at affordable rates. They are tasked with finding alternative sources of building materials in addition to the already existing block and mortar.
Additionally, they are tasked with the responsibilities of introducing alternative ideas for example pre-fabricated housing and also sensitising the public that these alternatives are as good as brick and mortar. They also adopt new technology that can make production of housing units cheaper and faster.

Costs
Apparently most houses range between Shs150m to Shs200m. These apartments comprise a kitchen, two bathrooms, and two bedrooms, each apartment is 110m2 in size.

“Through mortgages, estate owners are also able to extend services to their clients. Mquiresh explains: Housing providers have ties with the bank. Clients negotiate and we submit our land titles to the bank. The bank then pays us for the apartment and the customer pays the bank in installments,” says Shehabi Mquiresh, Director and CEO of Comfort Homes located in Nalya.

Payments can be made to the bank with interest rates of 18 per cent to 22 per cent, over a period of five to 10 years. This, although costly in the long run, seems like a good deal for Ugandans who may not have ready income to purchase the houses at once.

Where to find them
Waves Mordern affordable homes
It is located in Daka road, Kungu, Najjera II, near Vine International Christian Academy. The house has two bedrooms at Shs115m and three at She 130m

Gemini apartments
Located in Kiira town council, Kyadondom, Wakiso District is a two bedroom self-contained house with a sitting room, kitchen and terraces.

Another is South Gate properties at Gates Community on 12.5 acres, Namugongo. It has 38 Bangalores and 60 apartments,
In Nalya opposite Metroplex is Comfort Homes Apartments at Shs 153m.

Challenges and solutions
In delivering affordable accommodation to the population, estate developers are limited by absence of infrastructure in some hard to reach areas. This, Dr Baryomunsi says, has forced a number of them to hike prices of houses in these areas.

“Some apartments are expensive because they are in areas without water, electricity and tarmacked roads, forcing developers to incur a lump sum on these services. The government will therefore try to extend these services to such areas so that housing can be affordable for the majority of Ugandans,” he highlights. Edwin Musiime, CEO Crest Group, says extending infrastructural services will also attract developers to build affordable housing in suburbs. Real estates development in the country is an assurance to Ugandans that one does not have to be rich to afford good accommodation with good

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