_What trends are shaping Kampala's Residential Property Sector?

One trend observed in the market is the growing demand for condominium units in the neighbourhoods of Mbuya, Muyenga and Munyonyo, as purchasers seek alternative locations on the back of the high land prices in the Kampala Central Business District. Condominium property supply remains limited in these areas, indicating a gap in the market.

The emerging trend of high sale-prices for 3-bed condominium units, ranging from US$380,000 to US$500,000 persists in the recent developments in Kololo. This trend, as earlier indicated is speculative and unsustainable, as developers engage in a competitive race, each to build unique properties offering more space and to a higher specification which they are speculating that the market pay a premium for. This sets an unrealistic precedent, that buyers are both capable and willing to pay a premium for condominium properties, and ignores the effect on income yields and resale values.

Ironically however, developers are ignoring and oblivious to the growing demand for apartment units for sale priced between $100,000 and $250,000 in areas located within a 10-kilometer radius of the CBD. The market is under supplied within this price range, creating a substantial gap that presents an opportunity to be seriously considered.

Notably, the trend of landowners in the prime residential suburbs engaging in joint venture strategies with developers to build apartment blocks has resulted in a growing supply deficit of detached housing rental options, and gated communities as many opt to construct apartments. Consequently, an unmet demand in this housing category has emerged, particularly among higher-level management diplomats and expatriates who have limited options to consider.

Emerging Secondary Suburbs

In the secondary mid-income suburbs of Naalya, Najjera, Kira, and Kulambiro, there is a growing supply of relatively affordable housing to meet the demand in this segment. Additionally, there has been a noted rise in interest in suburbs located along Entebbe Road, including Kigo, Sekiwunga, Bwebajja, and Garuga. These neighbourhoods are experiencing growth as buyers take advantage of the expressway, which has significantly improved access to the CBD.

Fig. 1: A property for Sale in Kigo, Kampala

Their growing popularity is attributed to; the diverse range of house types, relatively affordable land, and the ability to strike a perfect balance between the vibrant city life and the serene ambiance of suburban living. The large young population, affordable housing options, prospects in the Airbnb industry, and shared living opportunities are some of the factors driving housing demand in the suburbs.

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