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The Future of Condos in Uganda

Condos have faced hesitancy from potential investors. Image source: Daily Monitor

UGANDA, Kampala | Real Muloodi NewsCondos, a promising solution to Uganda’s housing challenges, have faced hesitancy from potential investors. This reluctance is due to a tarnished reputation from accusations of poor construction, inadequate maintenance, and management inefficiencies.

Publicised legal disputes, financial mismanagement, and regulatory challenges have also contributed to eroding trust in the condo sector.

In 2023, some condo owners took property developers before the Inspector General of Government (IGG), Betty Kamya Turwomwe, accusing them of selling defective condos.

John Paul Okwir, a condo owner, cited problems with the block’s roofs and alleged a compromised foundation. Efforts to get the developer to fix these issues were allegedly rebuffed due to an expired warranty.

Popularity of Condos

Despite these issues, condos continue to grow in popularity. Annet Babigamba, the director of sales and marketing at Universal Multipurpose Enterprises, attributes this to a revised strategy.

“In the last 10 years, the condo sector has managed to revise its strategy and has returned to the market with different concepts such as low cost, luxury, and affordable,” she says.

Babigamba believes that condos represent the future of real estate due to their broad appeal. With Uganda’s growing population and limited land resources, vertical construction is becoming necessary.

“Condominiums hold a universal appeal, catering to individuals across all age demographics,” she observes.

Features and Appeal

Condos offer unique features like swimming pools, fitness centres, and on-site shops or restaurants. These amenities are ideal for busy people and the elderly.

Another appealing aspect is the reduced maintenance burden. Condo owners typically only maintain their unit’s interior, while the condo association handles common area maintenance, landscaping, and exterior repairs.

Harold Turigye, the Company Secretary for Comfort Homes, addresses complaints about maintenance.

“We need to separate issues. What should the developer be blamed for? What should government agencies be blamed for? When should poor maintenance or usage be blamed?” he says.

Challenges and Solutions

Property developers have faced challenges explaining the purpose of management fees to clients.

“We have encountered instances where clients failed to embrace the concept of paying management fees,” Babigamba admits.

To address this, they embed the fee structure within contractual agreements and educate clients about these fees before handover.

Maintenance fees, ranging between USh130,000 to USh250,000, cover various services and are paid every six months or quarterly.

These fees are essential for sustaining condo services and are clearly outlined in sales agreements and the condominium law. The fees are subject to negotiation between homeowners and property managers.

While maintenance fees cover general upkeep, individual condo owners are responsible for internal repairs. If an issue is due to the developer’s oversight, they are responsible for rectifying it.

Location and Cost

Condos are often in prime locations, offering convenient access to urban amenities and reducing commute times.

In Kampala, desirable neighbourhoods like Bugolobi, Mutungo, Munyonyo, Naalya, Kololo, and Naguru contribute to long-term property value appreciation.

However, the prime location also presents a challenge in affordability. Babigamba argues that condo pricing is justified when considering location, amenities, security, and investment potential.

“The cost of buying land and construction is quite high, making the USh372m you pay for a condo in the same neighborhood more than fair,” she says.

Most condo projects offer flexible payment plans, with several banks providing mortgage financing for 70% of the cost to be repaid over 10 to 15 years.

“There is also an option of getting your money back in case you change your mind about the condo purchase,” Babigamba says.

These options make condos ideal for first-time homebuyers and individuals on tight budgets.

Protecting Investments

Deo Kalikumutima, a lawyer, advises potential buyers to do their due diligence.

“Check the structural integrity, engage architects, engage engineers, and do your part. Government should also intervene to protect these people from unscrupulous industry players,” he says.

Babigamba adds that disappointment is sometimes due to unrealistic expectations.

Babigamba advises young homeowners to prioritise location over luxury. “Affordable condominiums usually have one bedroom, kitchen, and bathrooms. We are selling a location that is affordable, accessible, and secure,” she says.

Condos can also be a lucrative investment opportunity for rental income or building equity over time.

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