Real Estate Agents of Uganda have requested President Yoweri Museveni to address their issues that have seen them battle a couple of financial consequences.
They aired their outcry during the the 9th annual international conference and annual general meeting in Kampala held under the theme: ”Fast forward to the future”.
They argued that the sector is facing many problems such as land issues,unfair taxes and access to finance to spur sector developments.
“We are tired of meeting in conferences and talking to our selves. Year in we talk about the same challenges and lack of real estate regulation. We therefore request the president to resolve unfair taxes, lack of access to long term finance for real estate investment and incentives once and for all,” Association for Real Estate Agents of Uganda (AREA) President Kongai Shirley said.
Moses Lutalo Broll Managing Director said real estate is profitable venture alluded to urgent enactment of real estates law to ensure transparency and address lack of code of ethics in the profession.
“Government must urgently enact new real estate laws like tenant and land lord bill. This sort out real estate Investment Trust to bring sanity in real estates industry in future,” Lutalo said.
“Whereas real estate is profitable, it needs a patient person. Retirement schemes have a goal of making profits for their members. So real estate looks unattractive for them since it takes a while to make a profit,” he added.
Bashir Juma Head of Business Development and Corporate Affairs Buganda Land Board in a related comment said that the real estate sector is grappling with financing costs because it is capital intensive hence diluting hopes of affordable housing access.
He attributed the high cost of housing to high cost of land, taxes as well as construction raw materials.
President Museveni Acknowledges Real Estate Sector Struggles
President Yoweri Museveni who was the Chief Guest acknowledged their Struggles in a remarks read by State Minister for Lands, Housing and Urban Development, Hon. Namuganza Persis Princess.
In his speech, Museveni acknowledged the struggles the real estate sector is facing as a result of COVID-19, and the rapid growth of urban areas.
According to the President, housing contributed an estimated average of 5.9% to Uganda’s annual GDP prior to the challenges brought by the COVID-19 pandemic. He acknowledged that the real estate sector is critical to Uganda’s economic recovery, following two years of pandemic-related economic disruption.
The Real Estate sector generates considerable tax and non-tax revenue to the Ugandan economy. The industry’s tax contributions include rental income tax, stamp duty, property rates, import duty, and excise duty, among others. Further, Uganda’s real estate value chain employs 30% of Ugandan work force, according to Museveni.
The president’s speech also touched on the rapid growth in urban areas, and the need to significantly transform the way we build and manage our urban spaces in order for Uganda to achieve sustainable development.
“There is a rapid growth of cities as a result of rising populations and increasing migration cities, especially in the developing world, and slums are becoming a more significant feature of urban life. Uganda is not any different,” he said.
Uganda’s population increases at an average rate of 3% per annum, and continues to present increasing housing demand particularly in the urban areas with an average requirement of 300,000 houses annually. Uganda has about 9 million households living in 6.2 million housing units with an average household size of 4.7 persons, according to Museveni.
While acknowledging the real estate sector struggles, he added “It is time for Government to prioritise the real estate industry in our planning, not just for its potential to contribute to much needed tax revenues, but also because it is an integral part of where Ugandans live and work and hence a basic necessity.”
The President listed various policies the Government has put in place to support the sector, including:
- National Housing Policy, which is operational
- Establishment of the National Land Information System and decentralising operations of the Lands Ministry through Ministry Zonal Offices which have increased access to Land
- Introducing and operationalising several laws, regulations and policies such as the Condominium Property Act and Regulations, The Uganda National Land Policy, Building Control Act, the Uganda National Housing Policy and others that are helping to streamline protection of land rights and increase access to land ownership for all.
However, the President Museveni acknowledges that despite all these efforts, there still exist challenges, specifically:
- The cost of housing is still very high for Ugandans this is because the lending rates continue to remain high, and
- We need to prioritise planning /organised housing. This will be a solution to 70% of all the problems we face in urban areas. If attention is given to organised housing, government would spend less on waste, reduce distance and time of travel, reduce traffic jams, energy and water losses, and medical bills, and it would enhance coordinated service provision by Government.
“We need to recognise and prioritise real estate as one of the major sectors in Uganda’s economy. This will significantly improve the economy as a whole,” the President concluded
According to Ministry of finance report, real estate contributes 10 per cent to Uganda’s Gross Domestic Product despite unregulated with unethical middlemen manning the sector as brokers.