Comparing the current state of Kigali with a decade or two, you will notice the difference and conquer with me that real estate is booming. Many structures are under construction while some completed and occupied, someone who visited the city a few years ago would notice the difference. However, there are major concerns in the city especially the rate at which you will find many vacant homes and commercial spaces of various sizes and what could this indicate about the future of real estate market in Kigali?
Investors must know that the rates of rents in Kigali keep dropping and there’s need for intervention on this matter. We can all see the crisis unfolding since the market is flooded with over 300 homes for rent and the remedy should be applied. We think that banks could reduce borrowings since many construction projects utilize bank loans or these financial institutions could increase interest rates on construction loans.
There are some forces behind this booming business in Rwanda, and we could relate to the dark history of the nation. Rwanda had been known for political instability, but things changed leading to rapid development in all sectors. Moreover, the middle class within Rwanda strive to buy or build homes, and the number of middle class is on the rise. Besides, the country having magnificent sceneries and perceived to be secure, many people who retire and would not wish to go to their original countries find Rwanda the most convenient country to live in Africa. It is also important to consider the projected data from the National Institute of Statistics of Rwanda which indicate that there are high chances of the population of Rwanda expanding by 50% and this calls for more shelters.
Rwanda does not need other regulations in real estate sector but leadership which would implement ways of pausing new constructions and operate professionally. Moreover, the leadership skills employed should promote the current housing market to other nations and diaspora as they create learning forums for real estate developers. Finally, the leadership should facilitate the development of investment industry to shift the mentality that real estate is the only safe way to invest in Rwanda. Investors should try other options like the stock market.
