Why Ugandan Youth Favor Condos Over Detached Homes

UGANDA, Kampala | Real Muloodi News | Condominium investment has become a popular trend in Uganda, particularly among young millennial investors who are increasingly recognising the potential of condos as a profitable and attractive investment opportunity.

With population and economic growth steadily rising, and government policies encouraging affordable housing, condos will continue to be a popular option for young millennial investors looking to invest in real estate.

Take, for example, 29-year-old John, a young professional who works in the banking sector. He was able to save enough money to invest in his first property, a one-bedroom condominium in the city centre. He purchased the property as a rental investment and has been able to generate a steady stream of passive income from rent. He plans to purchase more condos as rental properties in the future.

Another example is 25-year-old Sarah, a recent university graduate who works in the tech industry. She was able to purchase a two-bedroom condominium in a newly developed area of the city. She plans to live in the property for a few years before renting it out as an investment.

In addition to John and Sarah, many other young millennial investors are turning to condos as an investment opportunity in Uganda for several reasons, as noted below.

Affordability

One of the main reasons why condominium investment is so appealing to young millennial investors is its affordability.

With the growing Ugandan economy, young professionals have greater access to property ownership. The World Bank reports the Ugandan economy grew at 4.6% during 2022, which was faster than anticipated. The economic recovery is expected to continue, with GDP projected at 6.2% in 2023. This economic growth is creating jobs and boosting incomes, which is leading to more young people being able to afford to buy property.

However, high house prices in urban areas often prevent young people from buying single-family homes. Condominiums, on the other hand, are often more affordable, making them a more accessible option for first-time buyers.

Appreciation Value

Condominium investment offers good potential for appreciation in value over time. This is particularly true in areas that are experiencing population growth and economic development. As the demand for housing increases, so does the property’s value, making it a good investment opportunity for those looking to buy and hold for the long term.

Attractive Lifestyle Amenities

Many young millennial investors are also attracted to the lifestyle benefits that come with owning a condominium. Condos often offer access to a wide range of amenities and shared facilities.

Examples of such amenities may include a fitness center, swimming pool, clubhouse, laundry facilities, and outdoor areas for recreation. These amenities are typically not available or are limited in single-family homes, which can make condominium living a more attractive option for those who enjoy having access to these types of facilities.

Maintenance

Condominiums offer an advantage over single-family homes in terms of maintenance due to the shared responsibility for upkeep. In a condominium, the maintenance and repair of common areas such as hallways, elevators, and exterior structures are typically managed by the homeowner’s association and paid for through monthly fees. This means that individual condo owners don’t have to bear the full financial burden of maintaining the entire building.

In contrast, in a single-family home, the owner is responsible for all maintenance and repair costs. This can become expensive and time-consuming, especially for older homes that require regular upkeep.

Profitable

Condominiums provide a convenient and profitable investment opportunity for young millennial investors looking to generate rental income.

Owning a rental condominium can produce a stable source of passive income from collecting rent from tenants on a monthly basis. This can help to offset the cost of ownership and potentially generate profits.

In addition, condominiums are often located in prime locations, such as urban areas with high demand for housing, which can result in higher rental rates and increased appreciation in property values over time.

Furthermore, the shared amenities and maintenance can make them more attractive to renters, increasing the demand for condos as rental properties.

High Demand

Uganda’s population is rapidly growing. According to the Uganda Bureau of Statistics, the population of the country is projected to reach over 48 million in 2023. This population growth is driving a high demand for housing, particularly in urban areas where most of the population growth is taking place.

In addition, there is also a shortage of affordable housing in the country. To address this, the Ugandan government has implemented policies and regulations to encourage the construction of affordable housing, which has led to an increase in the number of condominiums being built, making them more accessible to a wider range of buyers.

Due to the high demand for housing, condominiums are easy to rent out, or to liquidate in case one needs quick cash.

Flexibility

Condos can be easily transformed into an Airbnb or luxury furnished apartment for short-term rentals since they are already located in safe and upmarket neighbourhoods.

What the Experts Say

According to Lucy Kaitetsi Wamimbi, Head of Residential Agency at Knight Frank Uganda, a leading real estate company specialising in condominiums, the market for these properties is primarily driven by young professionals and investors. These individuals, who are typically between the ages of 30 and 45, often have access to mortgage financing and are looking to buy their first home. Additionally, empty nesters in their late 40s to 60s are also drawn to condominiums as a second or third home.

Cissy Namaganda, a real estate specialist with Cinam Investments, concurs that condominiums are popular among young professionals, particularly those in their 30s and early 40s, who are single or have small families. These individuals are attracted to the convenience of the properties, which are usually located close to the central business district for easy commuting. She also notes that social media and peer influence play a role in the popularity of condominiums amoung this demographic.

However, as people age and their needs change, Namaganda believes they may opt to sell their condominiums for larger homes further away from the city center.

“No one wants to host a kwanjula of their first born daughter in a condominium,” she quips.

She adds that most of the condominiums are in prime locations that are likely to appreciate over time, making them a smart financial investment for younger buyers. Cissy says that by the time these financial-savvy millennials are ready to sell, they will be able to recoup twice or three times their initial investment.