The condo's popularity comes of age
Sep 14, 2016
According to Judy Rugasira, the Knight Frank managing director, the Condo’s affordability and easy maintenance, have contributed greatly to its popularity, especially among the mid income earners.
The condominium's popularity in Kampala's real estate and mortgage sector has bloomed of late, accounting for at least 60% of the total units mortgaged last year, real estate experts have said.
According to Judy Rugasira, the Knight Frank managing director, the Condo's affordability and easy maintenance, have contributed greatly to its popularity, especially among the mid income earners.
"Condominiums are often priced lower than single-family homes, and for younger people interested in home ownership, a condo can be a great first step," she said.
Speaking on the sidelines of the Adam's apartments launch in Luzira last week, Rugasira said there has been an increase in condominium properties for sale, especially in Kira, Naalya, Luzira, Mbuya and Najjera.
"These cosmopolitan areas are becoming increasingly popular for young middle income home owners, who would rather buy a condo than a family house," she said.
A condominium is a form of multifaceted apartment building, whose specified units are separately owned, and the remainder, such as corridors and recreation areas, is collectively owned.
Rugasira said one of the biggest advantages of buying condos is the down payment and installments method often employed, which makes the process more affordable.
"In Uganda, where mortgage is very expensive, most young people find it reasonable to pay installments to the property owner, without interest from a bank, and that is one of the reasons these structures are gaining fame," she said.
A recent survey by the central bank showed that residential mortgages were priced at an average of 22.02 % while commercial mortgages attracted 21.81 % at annual interest.
The bank ‘s statistics also indicate that combined commercial bank mortgages for residential properties has averaged sh800m since October 2015, which is still very low for the growth of the sector.
Another survey, done in 2014 by the Uganda Bureau of Statistics (UBoS), revealed that Uganda has a housing deficit of 550,000 units, 160,000 of which are in urban areas, with Kampala carrying a housing deficit of at least 100,000 units.
"Right now the challenge is that interest rates in the mortgage industry are very high, and they feed into the final price of the unit. So what we are trying to do is to see how we can partner with the World Bank to bring in cheap money into the housing sector in Uganda through banks, so people can access mortgages at a cheaper rate," said Dave Kayangayanga, the principal housing officer in the Ministry of Lands .
He said the rising housing shortage in the country, expected to hit 8 million by 2020 if critical measures to address the problem are not taken.
"The condos, for now, are a good solution for the housing needs of mid income families, but we also have low income families, whose needs seem to be ignored. When the money comes, in about two years' time, it will definitely help in subsidizing the lending rates to make housing affordable for everyone," he said.
A recent Knight Frank report, released in Kampala recently, underlined an increasing demand for middle income housing in Kampala's metropolitan areas, as demand for prime residential accommodation reduced significantly.