What is an affordable home? This is one of the questions that kept coming up at a recent conference organised by real estate players that took place in Kampala. The conference was hosted by the Association of Real Estate Agents (AREA) at Speke Resort Munyonyo in Kampala.
The cheapest condominium on offer among the exhibitors was at Shs60m. A single-bedroom house in a well-organised estate somewhere in Gayaza. In comparison to the other houses of the same specifications on the market, this was a good price. The second was priced at Shs85m.
“Every developer is targeting the high-end market. I think it is time to target the low and middle-income-earners,” Judy Rugasira Kyanda, CEO of KnightFrank and one of the participants, says.
“Investment is motivated by profit. Investors follow the money. You can’t build for low-income earners because they can’t afford it. Even if you are Bill Gates, you can’t just build houses to give away at no profit,” Pradeep Karia, proprietor of Royal Palms Estate, replied.
“The cost of materials alone can’t allow us to build affordable houses. That is before factoring in the cost of land which is too high,” Simon Agaba, the headof marketing at Comfort Homes interjected.
“But what is an affordable house?” the question was raised for the umpteenth time.
Affordability is relative. For instance, for a Ugandan who earns Shs1m a month, an affordable home would cost at most, Shs43m. Which is surprising because this is still out of reach for most people. How about half of that? How about Shs20m?
Chuck neighborhood builder
Can Shs20m build a modern urban home? According to one of the AREA members, this is more than a possibility. Cissy Namaganda, proprietor and CEO of Cinam Investments, says one of the factors that contribute to high costs of building is the unprofessionalism.
“On the surface, the neighbourhood builder is affordable. However, the greatest number of them are not professional enough to provide you with reliable numbers.
He will tell you that amount X will deliver a home, but at the end of the day, he might give you excuses. This is the best-case-scenario. The worst-case-scenario is that your materials might be stolen so much that the house will not be completed and if it is, it is no good,” she says.
“But yes, you can build a modern urban house for Shs20m,” she emphasised. “It will be small, but nice and desirable.”
Namaganda maintains that with Shs20m, in the hands of the right professionals, you can build a studio apartment (single bedroom house) that is modern and comfortable. Under her new initiative, called “Beera Landiloodi” (Become a Landlord), she has helped clients build houses that are as cheap as Shs20m (and over Shs30m) so far.
“Not all homes have to be big and expensive. If you approach the professional, you are able to know the precise quantities. We sit together, draft a plan and cost it for you in an honest, open way.
“Knowing this helps you with budgeting. You can increase or reduce the amount spendable. A true professional will keep their word and not cheat you. And Shs20m could turn you into a landlord,” she says.
Such a house would contain the following:
An open living area consisting of a sitting room, the dining area and kitchen. Merging these spaces into one hall saves money and space. Each of these functional spaces flow into each other seamlessly in a relatively small space (as small as 10X12 ft). This creates a sense of spaciousness in a compact space.
That is the first section. The second section is of course the bedroom with an ensuite bathroom. Four walls outside and one wall on the inside separating the living room and bedroom. This minimal walling style reduces the cost of materials and labour. Such a house would have a maximum of three doors and two windows.
“To reduce the cost further, the house would come with a flat roof as opposed to the tradition cone-shaped roof which is much more expensive,” Namaganda says. “Anyone who is capable of, or is paying Shs500,000 in monthly rent can own a house if you pay Shs1m a month, that Shs12m a year. That can complete a house.
The Shs20m excludes the cost of land. Depending on where you buy the land, a standard plot with a land title can go for as low as Shs6m and as high as Shs100m.