UGANDA, Kampala | Real Muloodi News | According to the Uganda Bureau of Statistics (UBOS) Residential Property Price Index report, residential property prices in the Greater Kampala Metropolitan Area dropped in the first quarter of the fiscal year 2022/23.
UBOS released the findings of the first quarter of the Residential Property Price Index in Kampala on 30 September 2022, indicating that property prices in the Greater Kampala Metropolitan Area had fallen by 12.4% from the fourth quarter of the fiscal year 2021/22.
According to UBOS, the residential property price drop was caused by weak demand in the face of surging inflation, which has already reached double figures.
With inflation in the rise, Bank of Uganda has steadily increased the Central Bank Rate (CBR) in an effort to reduce the money supply to combat the rising the inflation rate. The CBR currently stands at 10% as of October 2022, the highest level recorded since 2012.
The increasing CBR has caused mortgage rates to rise, which results in decreased home buying demand, another contributing factor in the fall in home prices.
According to Ms Juliet Nakayenga, a Senior Statistician in Microeconomics at UBOS, Makindye and Kampala Central had the greatest drops in property values.
For example, she stated that property prices in Kampala Central and Makindye fell by 28.2% during the quarter, compared to a 12.7% growth in the Q4 of 2021/22.
She cited the example of property prices in Kampala Central and Makindye, which fell by 28.2% during the quarter after rising by 12.7% in the Q4 of 2021/22.
She pointed out property values in Wakiso, Nakawa, Kawempe, and Rubaga all saw decreases as opposed to rises during the last quarter of the fiscal year 2021/22.
Property prices fell by 4.2% in Wakiso compared to an increase of 14.4% in the Q4 of 2021/22, and by 9.2% in Nakawa compared to an increase of 5.4% in the preceding period.
Prices in Kawempe decreased by 0.3% while rising by 3% in the fourth quarter of 2021/22.
But according to Ms Nakayenga, the Greater Kampala Metropolitan Area’s property prices fell by -1.3% year over year in the fourth quarter of 2022/23 compared to -1.5% in the previous quarter.
Residential property inflation was mostly to blame in the Kawempe and Rubaga Divisions, which rose to 10.7%% this fiscal year from 9.7% in the year that concluded in June 2022.
The residential property prices in Wakiso District declined to -7.9% in the first quarter of the 2022/23 fiscal year from -11.4 per cent in the prior fiscal year, even as it decreased in Kampala Central and Makindye to -13.7 per cent from 2.4%. Inflation in Nakawa dropped to -12.7%.
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