What you need to know:
- However, Ubos indicated, the increase had not impacted the overall quarterly index due to a massive drop in one of the measured areas.
Prices of residential properties for both purchase and rental units increased across the five divisions of Kampala Metropolitan Area in the third quarter of the 2020/21 financial year, according to Uganda Bureau of Statistics (Ubos).
However, Ubos indicated, the increase had not impacted the overall quarterly index due to a massive drop in one of the measured areas.
According to Ubos, prices of residential properties were much higher in the Kampala Central and Makindye cluster, which increased by 26.1 per cent compared to Kawempe and Rubaga, which rose by 10.5 per cent.
The increase was much higher than the 8.1 per cent and 12.4 per cent that the two measured areas had registered in the second quarter of the 2020/21 financial year, respectively.
However, Ubos noted the Wakiso area had registered a decline of 21.3 per cent from an increase of 8.9 per cent during the 2020/21 second quarter.
Movement in prices of houses and rental units is normally used to measure the performance of the economy with an increase denoting periods of economic expansion while falling prices are associated with a slowdown in the economy, according to Ubos.
The rising real estate prices, Ubos says, often leads to an improvement in the household sector, but sometimes feeds into inflationary pressures.
However, on an annual basis, according to Ubos, residential properties prices inflation for the 2020/21 third quarter declined to - 0.5 per cent compared to 5.2 per cent in the 2020/21 second quarter.
Ubos said the overall stability was due to a massive decline in the Wakiso area where residential property prices declined to - 7.1 per cent for during the period from 21.8 per cent in the 2020/21 second quarter.
Kampala Central and Makindye area saw a massive increase in property prices, which pushed up housing inflation to 7.6 per cent compared to - 4.8 per cent recorded in the 2020/21 second quarter.
Importance of property indices
Individuals and organisations use Residential Property Price Indices to directly or indirectly influence decision making or inform the formulation and conduct of economic policy across the economic dividid.
For instance, players in the real estate sector use such indices to determine investment while government uses such data to determine areas of investment, especially utility service providers.