Experts warn government of looming housing crisis in Uganda

Sunday November 24 2019

The National Housing and Construction

The National Housing and Construction Corporation Impala housing estate in Namungoona, a city suburb. FILE PHOTO  

By Tony Mushoborozi

Experts who attended a real estate conference in Kampala have warned government of a looming housing crisis in the country.
At the current construction rate of 60,000 units per year, fully left to the private sector, the experts say it will lead to a deeper crisis than ever before given the fast growing population.

The minister of Lands, Housing and Urban Development, Dr Chris Baryomunsi, stressed the need for government to take over the heavy burden of housing for it population. He said this at the opening ceremony of a three-day real estate conference organised by the Association of Real Estate Agents Uganda (AREA). The conference held at Speke Resort Munyoyo, in Kampala, started on Wednesday November 20 and ended Friday November 22.
Dr Baryomunsi encouraged all government departments to get involved in real estate discussions to help combat challenges in the real estate industry.

“Uganda’s total fertility rate has been at seven children per woman for a very long time. It has only recently dropped to 5.4 children per woman. Today, there is a population momentum that is not about to slow down. Even if all families in Uganda decided to produce one child per family, the population momentum will not slow down any time soon. This means that the housing deficit can only continue going up and government must come in,” Dr Baryomunsi said.

At a growth rate of 3.5 percent, Uganda has one of the fastest growing and youngest populations in the world. This feeds into the housing deficit of two million units as of end of 2019. Experts expect that deficit to have grown to eight million units in the next 10 years. And at the current construction rate of 60,000 units per year, fully left to the private sector, a crisis is looming.

The different real estate players deliberated on how the public and the private sector can work together in a bid to address the national housing backlog. It was unanimously agreed that innovative approaches are needed to solve the challenges in the sector.

One of the challenges was raised by National Housing Uganda, the biggest developer in the country. The company chief executive officer, Mr Kenneth Kaijuka decried the insurmountable challenges that the private players must jump over to deliver.

Advertisement

Mr Kaijuka said, “One of the biggest challenges we have in the housing sector is a lack of a regulating authority. Because of that, there is a lot of money laundering in the sector that is causing so many problems.”

At the conference, Mr Baryomunsi also launched the AREA database, which the association believes will help fight fraudsters in the real estate business. Fraud is one of the biggest challenges in the industry. With the launch of the AREA database, members of the public, can now verify details of real estate agents before dealing with them.

Real estate players at the conference decried the widespread corruption in the system, which delays approval processes, thus affecting their effort to deal with the housing deficit in the country.

They also urged government to provide, especially cheap financing for the real estate sector if the prices of housing are going to come down. Developers borrow from the commercial banks whose interest is very high. High interest rates cause the price of the houses to go up, which in turn contributes to the ever increasing housing deficit.

Advertisement