UGANDA, Kampala | Real Muloodi News | The housing and real estate market in Uganda is rapidly evolving, shaped by sustainability, technology, and changing economic conditions. Here are ten key trends that are influencing this sector today.
1. Rise of Green Buildings
Sustainability is becoming a major focus for property developers in Uganda. The real estate sector is responsible for about 40% of total greenhouse gas emissions.
As awareness of environmental issues grows, more developers are adopting green building practices. The International Finance Corporation’s EDGE (Excellence in Design for Greater Efficiencies) certification is gaining traction, helping buildings achieve better resource efficiency.
“Green buildings are not just good for the environment; they also save costs in the long run,” says Emmanuel Kiyimba, a real estate expert.
2. Impact of Green Certifications on Property Value
Properties with green certifications like EDGE are often viewed as more desirable. They typically have lower operational costs and a smaller environmental footprint.
“Investors are increasingly recognising that sustainability adds value to properties,” explains Brenda Tushabe, a property analyst. This shift is likely to influence real estate valuations significantly.
3. Technological Advances in Valuation
Technological advancements, especially in AI, are transforming property valuation. AI can analyse vast amounts of data, including market trends and neighborhood characteristics, to predict property values with high precision.
“AI is a game-changer; it allows us to make faster and more accurate assessments,” says Richard Ssempebwa, a valuation expert. This capability helps identify patterns that traditional methods may overlook.
4. Update in International Valuation Standards
The International Valuation Standards (IVS) will undergo updates effective January 31, 2025. One important addition is a focus on data quality and selection. This update aims to guide valuers on how to handle and verify data effectively.
“With better data, we can provide more reliable property valuations,” states Sylvia Nabunya, a senior valuer.
5. Evolution of Automated Valuation Models (AVMs)
Automated Valuation Models (AVMs) are becoming more sophisticated, incorporating big data from sources like satellite imagery and demographic studies. This advancement allows for a more comprehensive analysis of property values.
“Enhanced AVMs can analyse millions of data points to give us better insights,” notes John Kato, a real estate consultant.
6. Improved Real Estate Databases
Advancements in technology have led to the creation of more efficient real estate databases. These databases compile data from various sources, including public records and market surveys, allowing for more accurate property assessments.
“Good data is crucial for making informed investment decisions,” emphasises Emma Nansubuga, a data analyst in the real estate sector.
7. Inflation and Its Impact on the Market
As of May 2024, Uganda’s average headline inflation rate stood at 3.6%. In response to inflationary pressures, the Central Bank of Uganda raised the Central Bank Rate (CBR) to 10.25% in April 2024, the highest since 2017.
High interest rates affect borrowing costs, making it more expensive for buyers. “Inflation can create challenges for the housing market, but it also encourages strategic investments,” says Kevin Mutai, an economist.
8. Active Mortgage Market Despite High Rates
Despite higher interest rates, the mortgage market remains active. Mortgages extended by commercial banks grew by 2.1% in April 2024 compared to December 2023.
“People still want to invest in homes, even with rising costs,” explains Diana Kansiime, a mortgage advisor. This indicates a steady demand for mortgage financing in the current economic climate.
9. Shift Toward Commercial Mortgages
A significant trend in the mortgage sector is the shift toward commercial mortgages. As of April 2024, commercial banks allocated 52.9% of their mortgages to commercial properties, highlighting a strategic preference for less risky investments.
“Commercial properties are seen as more stable in the current environment, which is attracting bank interest,” says Oliver Ssebuguzi, a financial analyst.
10. Increased Demand for Affordable Housing
With urbanisation on the rise, the need for affordable housing is becoming more pressing. The government and private developers are focusing on creating affordable housing solutions.
“Affordable housing is critical for our growing population, and innovative financing is essential,” asserts Jennifer Nyeko, a housing policy expert.
Initiatives such as public-private partnerships are being explored to address this pressing issue.
The housing and real estate market in Uganda is in a state of transformation, influenced by green building initiatives, technological advancements, and economic conditions.
Understanding these trends is essential for anyone looking to invest or participate in the sector. As the market evolves, staying informed will help navigate its complexities and capitalise on emerging opportunities.
The housing and real estate sector in Uganda is adapting to modern challenges and opportunities, making it a dynamic field for investors, developers, and homebuyers alike.
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