RESIDENTIAL HOUSES OUT NUMBER BUSINESSES IN UGANDA

Uganda housing backlog in the low-income bracket is alarming and needs government intervention since the numbers are big and the repayment can become tricky based on the earning of the occupants.
On the other hand, there is a housing surplus demand in the middle and high-income earners bracket and this has caused an investment imbalance in the economy. Many people have invested heavily in the real estate sector with the hope of either selling or renting out the houses and returns have failed to come out. The monthly rent is stagnant and house prices are dropping every year if you compare it on the dollar. One other serious problem we have to solve is the building technology we are using here in Uganda. We are using the permanent construction for residential houses meant to last a maximum of 30years. Wh
y this short a time is your active, adult lifetime and house design. Permanent construction is meant for institutional construction like schools, churches, hospitals, government offices etc which in many times the design is simple without any fancy appearance. So we need to get a construction technology for residential houses that makes house affordable. We shall discuss this in another blog.
But today I want us to discuss the issue of having more luxurious residential houses than businesses yet the houses have very little return on investment.
This morning as I was moving through Ntinda and Naguru I saw a number of magnificent residential houses valued in hundreds of millions but can only earn the owner about 5m/= per month. Am on a number of real estate brokers social media platforms advertising houses for sale. I see a building being sold at about 2bn/= and earning only 17m/= per month and wonder how and when the owner will be able to recover the investment given that he may have to repay the mortgage, maintain the building, pay rental tax etc. These are all costs on the investment before making any net earning. I've come to see why some property owners abandon their properties in banks after getting a loan.

INVESTMENT SUBSTITUTION
Instead of the construction of more luxurious residential houses, I suggest we invest more in businesses and industries. Residential houses will not develop our country without industrialization and business development.
A residential house costing about 400m/= in say, Kira, Naalya, Kiwatule, Ntinda, Kisasi etc will at most earn 2m/= per month. A business valued at 400m/= weather trading or manufacturing will earn not less than 30m/= net after making all deductions. This is why all Indians, Chinese, Kenyans, South Africans are not in the real estate. They don't see how money can come out of the real estate to build their capital.
This real estate development has managed to make some financial improvement to the following;
1. Building materials manufacturers
2. Building materials stockist
3. Land dealers and condominium developers and
4. Building contractors

CONCLUSION
Real estate in Uganda is not regulated and it's not an area for everyone to go in especially development.

It is done by investors with cheap money and low or tax holidays. Let National Housing, Ruparelia Group, Amalgamated Properties, Property Services Ltd etc venture in it not any Tom Dick and Harry. Real estate is an investment and not a business which can multiply your capital.
We need to increase the number of businesses to surpass the luxurious residential houses we are acquiring. This will create more jobs, increase taxes and reduce unemployment in Uganda.

For God and my Country