UGANDA, Kampala | Real Muloodi News | Kampala Central and Makindye divisions are identified as the areas with the most expensive rentals, according to the latest report from the Uganda Bureau of Statistics (Ubos). This report tracks residential property prices and inflation, revealing significant trends in the rental market.
In the first quarter of the 2024/25 financial year, residential property prices in these prime areas increased by 16 per cent, a notable rise compared to the 6.9 per cent increase recorded in the fourth quarter of the 2023/24 financial year.
Christopher Asigwire, a senior statistician at Ubos, attributed this surge to high demand for residential properties in these sought-after locations.
“The market dynamics in these areas reflect a growing interest in residential living that offers convenience and access to urban amenities,” Asigwire stated.
Price Fluctuations in Other Areas
While Kampala Central and Makindye dominate the market with their high rental prices, other areas also show noteworthy trends.
Kawempe and Rubaga saw a slight price increase of 2.6 per cent in the first quarter of 2024/25, recovering from a decline of 1.2 per cent in the previous quarter.
In Nakawa, property prices increased by 0.7 per cent, marking a rebound from a similar decline in the preceding quarter.
In contrast, Wakiso District experienced a 0.5 per cent decline in property prices during the first quarter, following a more significant 2.3 per cent increase in the previous quarter. This variation in rental prices across different districts indicates the fluctuating nature of the real estate market in Kampala.
Construction Costs and Their Impact
The Ubos report also sheds light on broader economic factors that influence rental prices, particularly construction costs.
As of August 2024, construction inflation decreased to 1.5 per cent, down from 1.8 per cent earlier in the year.
Irene Musiitwa, a senior statistician in the construction sector at Ubos, noted that the primary driver of this decline was the reduction in costs associated with demolition and site preparation, which fell to 2.5 per cent in August from 3.6 per cent in July.
“Inflation for building and finishing materials also saw a slight decrease, registering at 0.5 percent in August, compared to 0.6 percent in July,” Musiitwa explained. This downward trend in construction costs could potentially stabilize rental prices in the long term.
Sector-Specific Developments
The report detailed changes within specific sectors of construction, particularly civil engineering and utility projects. Inflation rates for civil engineering works recorded a decrease to 1.2 per cent in August from 1.5 per cent in July. This reduction was primarily due to a significant drop in inflation for utility project construction, which fell to 0.1 per cent in August from 1.5 per cent in the previous month.
Additionally, inflation for the construction of railways and roads dropped by 1.4 per cent, decreasing from 1.5 per cent in July.
These shifts in construction-related inflation may influence the rental market as overall construction costs stabilize or decline.
Implications for Renters and Investors
The ongoing price increases in areas with the most expensive rentals highlight the robust demand for residential properties in Kampala.
Investors looking for opportunities may find that the Central and Makindye divisions offer significant potential returns, given the current market dynamics.
Moreover, the stabilising construction inflation rates could lead to more predictable pricing for future developments. This trend could ultimately benefit both renters seeking affordable housing and landlords looking to maximize their investments.
Kampala’s rental landscape continues to evolve, particularly in areas with the most expensive rentals like Central and Makindye.
The 16 per cent increase in residential property prices in the first quarter of 2024/25 shows the strong demand for quality housing.
At the same time, fluctuations in construction costs and inflation provide insights into the broader economic environment affecting the rental market.
Understanding these trends is crucial for renters, landlords, and investors alike as they navigate the complexities of Kampala’s real estate market.
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