A quick survey across the city of Kigali indicates that the construction sector in Rwanda is booming. But it is the high demand in the real estate sector that has been exacerbated by a growing middle class in the country that gives stakeholders sleepless nights.
Patrick Sebatigita, CEO of Ujenge Group-a construction company says that the construction sector boom in Rwanda had taken a significant chunk of the GDP, various sectors, infrastructure, offices and developments.
“But there is a high demand on real estate that we need to address,” he adds. Patrick says that some factors have deterred the burgeoning real estate in the country. Key among them is high cost of building material that have to be imported. For instance he says, 60% of construction material in Rwanda are imported. And this has caused the cost of houses to sky rocket. The high interest rates in banks has worsened the situation.
“You can really feel the burden of investing in a real estate project because the mortgage interest rates are quite high,” laments Sebatigita who is also a member of Young Presidents’ Association.
Tackling the situation governments in the East African Community bloc should provide incentives for manufacturers to produce finishing materials like flooring or ceilings.
With population growth of 2.7 per cent and a growing middle class, Rwanda is experiencing a massive boost in the construction sector and growing demand for real estate developments. However the population growth far exceeds the number of housing units being constructed in a year.
In a bid to offer a solution to the housing problem in Rwanda, Ujenge Group constructed first condominium homes in Rwanda. Condominium is the form of housing tenure and other real property where a specified part of a piece of real estate (usually of an apartment house) is individually owned.
“We had the first condo,” says sebatigita. “However, we faced all the challenges we can face on such developments but I think that the people were really keen in getting condos.”
The Ujenge Group CEO says that Rwanda has a long way to go in terms of really capturing the market but adds that the demand for housing will always be high.