A new rental property price index for Greater Kampala Metropolitan Area (GKMA) shows that prices of properties in the area have gone up especially in the Central and Makindye divisions.
The Uganda Bureau of Statistics (UBOS) study that covered all the five divisions and Wakiso District indicates that on an annual basis the prices of properties in the GKMA have been increasing since the second quarter of financial year 2017/2018 when they grew at 12.6%. This was also followed by growth of 8.6% in the fourth quarter 2017/2018 compared to 3.2 % price increment in the third quarter of 2017/2018.
Presenting the report findings at the UBOS head offices in Kampala on Monday, Sam Kaisiromwe, the principal statistician told the media that Makindye and Kampala Central divisions saw their prices increasing due to the high demand for both rental houses and spaces for business both from the private sector and government.
“Although prices went down in other divisions under survey the report finding reveals that on their other hand prices in Kampala and Makindye recovered fully in the fourth quarter of 2016/2017 and have generally continued to increase higher since the second Quarter in the financial year 2017/2018”He said.
Rental property prices in other divisions go down
According to Shirley Kongai, the president of Association of Real Estate Agents Uganda, due to a struggling economy, the real estate business is not doing well because of the less purchasing power from the public.
“Most of the clients are not willing to pay for costly rentals due to limited disposable income especially in the divisions of Nakawa, Kawempe. Makindye and Kampala Central have comparative advantage over other divisions that is why the prices went up,” she said.
Rationale of Rental property Price Index
Chris Mukiza the Director Macro Economic statistics at UBOS said that the survey is significant to policy makers, market analysts and researchers for a range of economic and social reasons.
“This is because the housing market plays an important role in the urban economy. Housing is a major source on individual wealth in the country .Thus changes in housing costs affects the disposable income of households thereby influencing consumer spending and saving decision,” he explained.
The rental property price Index measures the change in price change of residential dwelling over time. During the survey, different parameters were used in determining the price for the rentals and properties. They included the status of the building (whether the house is new or used ) structure (dwelling type) number of levels , number of bedrooms and the nature of the roof, floor among others.
BY SAMUEL NABWIISO