The Uganda Market Update 2017 states that residential housing supply is more pronounced in the prime Kampala suburbs of Kololo, Nakasero, Naguru, Mbuya, Bugolobi, Luzira, Muyenga and Ntinda.
The update says Kololo and Nakasero, in particular, are seeing the increasing redevelopment of old residential plots of o.50 to one acre, in line with the zoning regulations of these locations.
Additionally, swimming pools, gyms and children's play areas have become standard facilities provided at the new residential developments.
Knight Frank Uganda, attributes the growth to large infrastructure projects like dams and oil and gas, as well as the humanitarian response in northern Uganda, as well as improving infrastructure and growth of Kampala suburbs.
The update notes that the most expensive residential housing units, in order, are also Kololo, Nakasero, Naguru, Mbuya, Bugolobi, Luzira, Muyenga and Ntinda.
For instance, yields at the top end of the market are between eight and 10 percent for dollar-based rentals, while for build-to-sell properties developer's profit ranges between 25 and 30 percent.
Knight Frank Uganda also observes that there is a lot of residential housing stock for sale on the market, although there are few buyers with the financial capability to conclude sales in good time at acceptable prices.
As a result, buyers are taking advantage of the "slowdown" to drive hard bargains for discounted prices while vendors are holding on for as long as they can in the hope that they will get an acceptable price before they are forced to sell.
On the other hand, rents for serviced and furnished apartments in prime residential locations average $2500 (Shs 9 million ) for a two-bedroom apartment per month and $3500 (Shs 13 million) for a three-bedroom, in Nakasero and Kololo.
The lowest rate is in Ntinda, with a two-bedroom apartment going for $ 1,000 dollars (Shs 3.6 million) and a three-bedroom apartment going for $ 1,800, equivalent to Shs 6.6 million.
Realistically, these prices for rent and house buying are for A-listers like expatriates, rich Ugandans and organizations because they are simply not affordable to most Ugandans.
According to Knight Frank Uganda, there has interestingly been a noticeable increase in the take up of residential apartments over the past six months. This is attributed to both new tenants and also those whose agreements have come to an end and are moving to newer and more modern accommodation.
The update also notes that many organizations are compelling their expatriate staff to move out of standalone houses into apartments where overheads are perceived to be lower.
The biggest opportunities within the residential segment, according to the update, are in the middle to the upper low-income bracket where demand outstrips supply.
Uganda has an annual housing deficit of 210,000 units and 65,000 of this is within urban areas. Majority of this demand is for affordable housing.
High costs of inputs
Yet the cost of construction inputs keeps going up.
According to Uganda Bureau of Statistics (UBOS) inputs have increased by 1.6 % in the last one year leading to a hike in property rates.
According to UBOS, some of the key inputs that have increased are steel bars, electric wires, cement, timber and wages for workers.
