Housing sector review supplement
Nov 21, 2016
Supplement
High mortgage rates turn off home owners
By Vision Reporter
Mortgage rates in Uganda have consistently remained high for the low and mid income earners, stifl ing home ownership and property development. According to bank of Uganda statistics, commercial banks' mortgage lending rates currently vary between 18% - 25%, slowing down private sector borrowing and crowding private investment in the sector. A recent survey by the central bank also showed that residential mortgages were priced at an average of 22.02 % while commercial mortgages attracted 21.81 % at annual interest. The survey also shows that lending to commercial properties averaged sh550m in the October to June period, while property developers, estate and letting agents scooped an average of sh700m. According to the Uganda Bureau of Statistics, about 10 million people are currently employed in low paying jobs and cannot afford high value mortgage products. "This is less than 10% of people who can afford expensive mortgage products. The rest are a potential mortgage market for banks and the real estate sector which should be heavily invested in," Rajiv Ruparelia, the Crane Management Services managing director noted. CLICK HERE FOR MORE