KAMPALA:- Lands, Housing and Urban Development Minister, Judith Nabakooba, has made a chilling revelation that an estimated 900, 000 housing units in Uganda are substandard and in need of replacement or upgrading.
Nabakooba made this revelation while presiding over a graduation ceremony Friday at the Real Estate Institute of East Africa.
On top of the 900, 000 housing units being substandard, she revealed that the housing deficit stands at approximately 2.4 million, out of which 210, 000 units are in urban areas and 1. 395 in rural areas. “The real estate market is driven by demand and supply. When demand is greater than supply, the prices skyrocket. The reverse is also true,” she said.
According to Nabakooba, an analysis of Uganda’s real estate industry shows that there is a disconnect between the demand and supply of real estate products, both for sale and to let. “Market players are running the risk of sending the industry into limbo, because they are delivering products that consumers do not want,” she noted.
Nabakooba says that the sector is still characterized by the fact that most of the buildings in the Central Business District are being converted into medium size shopping malls; the fact that only one bank specializes in mortgage finance; a lot of demand for low income housing estates; and that a number of players are still too few and many of them small, among others.
The minister is cognizant of the fact that the “sector is majorly unregulated, and this has its own challenges” but she says that the government is committed to ensuring that the Real Estate Sector is regulated.
Her full speech
The Leadership of the Real Estate Institute of East Africa,
All Protocol observed,
Ladies and Gentlemen.
I feel honored and privileged to have been asked to preside over this ceremony of awarding Professional Certificates to participants who have completed their studies in Foundation and Advanced work – based Programmes of study.
I wish to commend the founders of Real Estate Institute of East Africa, for the Vision of starting this institution to train real estate practitioners, which is going to go a long way in imparting life-long development skills, developing leadership skills; qualities that will positively impact our communities, our country and the world at large.
Ladies and Gentlemen, as we all know, Uganda’s housing situation is characterized by inadequate homes in terms of quality and quantity in both rural and urban areas. The housing deficit stands at approximately 2.4 million housing units, out of which 210,000 units are in urban areas and 1.395 million units in rural areas. An estimated 900,000 units are substandard and in need of replacement or upgrading.
The real estate market is driven by demand and supply. When demand is greater than supply, the prices skyrocket. The reverse is also true. An analysis of Uganda’s real estate industry shows that there is a disconnect between the demand and supply of real estate products, both for sale and to let.
Market players are running the risk of sending the industry into limbo, because they are delivering products that consumers do not want. This risk is characterized by such aspects as having an over-supply of certain real estate products, which do not meet the purchasing power of most people in Uganda’s labour force or do not meet the current needs of Ugandan consumers.
Ladies and Gentlemen, Uganda’s Real Estate sector is characterized by;
i. Big residential estates;
ii. Majority of the residential houses have been put by individuals mainly for rental purposes;
iii. A number of office blocks built in various areas around the city;
iv. Most of the buildings in the Central Business District are being converted into medium size shopping malls;
v. There is only one bank which is specializing in mortgage finance;
vi. There a lot of demand for low income housing estates; and
vii. The number of players are still too few and many of them small.
But also we all know that this sector is majorly unregulated, and this has its own challenges.
Uganda’s real estate sector is an emerging market which is currently still in its infancy and one of the safest fields of investment in Uganda and has continued to grow at 5.6% over the last 4 years. The sector has grown tremendously over the past decade with many residential homes, business premises and office blocks being set up especially in the Greater Kampala Metropolitan Area.
Over the years the Ministry has implemented a number of interventions and Macro Instruments such as the Vision 2040, National Development Plans, Manifesto among others, all geared towards reducing the Housing Deficit. In 2016, the Government formulated the National Housing Policy, which provides a framework for housing development in the Country. The Policy aims at increasing the production of adequate housing for all income groups from 60,000 to 200,000 housing units per annum so as to meet the housing needs by 2022; improving the quality of the existing housing stock; promoting an efficient utilization of energy and other resources in housing; increasing access to affordable housing; improving security of tenure for property owners; and improving the mechanisms for development and management of the Real Estate Industry.
The Policy also provides for promotion of urban housing interventions to encourage Urban Authorities to put in place measures to provide for adequate and affordable housing based on the requirements of the urban population in their respective areas.
The Government is committed to ensuring that the Real Estate Sector is regulated. Currently, the Ministry is finalizing the development of the Real Estate Bill although a private Members Bill was already presented to Parliament. The Bill is not all sufficient to deal with issues of the real Estate Sector. It only deals with Real Estate Agency and leaves the other sub-sectors unregulated, that is why the Ministry is committed to harmonizing the provisions of the Private Member’s Bill and the one being developed by the Ministry.
The Ministry will continue to work with the different Partners including the Academic Institutions, development partners, financial institutions, Private Sector among others to address the housing concerns in Uganda.
Ladies and Gentlemen, let me now turn to this ceremony of awarding Professional Certificates. For the Institute, we thank you for having trained these graduands and imparting them with the necessary skills and knowledge required for the job market and we hope they will be able to apply the skills and knowledge as well compete favorably in the market both here in Uganda and regionally.
The graduands who are receiving professional certificates, this is your day and I congratulate you on your achievement and we applaud you on this successful stride. You are fortunate that you are graduating from an institution that has prepared you exceptionally well.
The Institute has prepared you not just on the academic front, but to play your part in helping communities improve their quality of life through improving the Housing Sector in Uganda. I request you to exhibit high levels of ethical considerations in performance of your duties with the training acquired.
My Ministry remains committed to work with the Institute and the various professions to foster development of our Country. We all have a role to play. I trust that my team at the Ministry will deliver the desired outcomes through the partnership and support of the various actors. This will be in line with the National Development agenda of transforming this country from the peasantry status to middle income status, which everyone is yearning for.
As I conclude, I wish to thank the Institute for the invitation, and I take this opportunity to wish all the Graduands all the very best in your future endeavors. To the teaching staff, keep up your excellent work in helping shape realtors.
FOR GOD AND MY COUNTRY!!