{"id":429588,"date":"2011-05-24T08:37:17","date_gmt":"2011-05-24T08:37:17","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/05\/24\/rents-shoot-up-in-kigali-as-housing-deficit-begins-to-bite\/"},"modified":"2011-05-24T08:37:17","modified_gmt":"2011-05-24T08:37:17","slug":"rents-shoot-up-in-kigali-as-housing-deficit-begins-to-bite","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/05\/24\/rents-shoot-up-in-kigali-as-housing-deficit-begins-to-bite\/","title":{"rendered":"Rents Shoot Up in Kigali As Housing Deficit Begins to Bite"},"content":{"rendered":"
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\"The<\/a><\/p>\n

22 May 2011<\/p>\n

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Nairobi \u2014 Tenants in Kigali have to endure drastic increases in rent due to a shortage of low-cost housing adding to already surging economic woes as households battle rising inflation.<\/p>\n

Higher food and transport costs pushed up the inflation rate in Rwandan urban centres for the sixth consecutive month in April to 4.98 per cent, the National Institute of Statistics of Rwanda said last week.<\/p>\n

Rwanda’s overall inflation rate, which has a higher weighting for food, surged more than five percentage points to 3.05 per cent in April from -2.03 per cent in March.<\/p>\n

The country’s housing needs based on its demographic and urbanisation trends are estimated at 25,000 units annually according to the National Bank of Rwanda: between 8,500 and 10,000 units for Kigali and 15,000 units for the rest of the urban centres.<\/p>\n

As of 2006, housing supply was estimated at 10,000 per annum countrywide.<\/p>\n

As a result of the huge supply gap, there has been a drastic increase in rent for both residential and commercial housing around Kigali.<\/p>\n

Real estate dealers say that in the past two years, commercial rentals have gone up by about 20 per cent specifically around the central business district.<\/p>\n

Average cost per square metre around the CBD range from Rwf10,800 ($18) to Rwf12,000 ($20).<\/p>\n

Residential rentals have increased to Rwf250,000 ($416) on average for a three-bedroom house, from Rwf100,000($166) in 2008. Analysts also attribute the increasing prices to the population which is growing at an estimated 2.8 per cent per annum combined with urban growth rate of four per cent per annum.<\/p>\n

The rate of urbanisation stands as 18.7 per cent with about 1.9 million of population living in urban areas.<\/p>\n

The urban demographic mass is concentrated in the Kigali city at about 1.1 million.<\/p>\n

Emerging middle class<\/p>\n

Prices have also been fuelled by the country’s fast growing middle class, return of the diaspora as well as huge business opportunities arising out of the city’s aggressive reconstruction and expansion plans.<\/p>\n

“There are many new businesses opening every day but that is not the rate at which office space is available,” Charles Haba, a property agent at Century Real Estate Company said.<\/p>\n

Mr Haba also attributed the hike to the uncertainty surrounding implementation of the Kigali masterplan which has forced some developers to suspend construction as they wait for approval from city authorities while some landlords are afraid to rent out space for fear of eviction.<\/p>\n

While there has been a boom in construction, Mr Haba observed that due to high construction costs incurred by developers who have to import almost all the raw materials, houses remain expensive.<\/p>\n

For instance, what is considered relatively cheap for residential purchase is about Rwf42.7m ($72,000) for a three-bedroom houses within the Gate Hill estate in Kanombe.<\/p>\n

Though the pricing in Kigali compares favourably in the region, Mr Haba noted that given the country’s relatively higher cost of living, the majority of the population cannot afford to purchase or rent houses offered.<\/p>\n

“If you look at the average mortgage rate of 16 per cent, it is a nightmare to afford that even if you are borrowing 100 per cent,” he said.<\/p>\n

He added that access to both mortgage and construction finance is still a daunting task in the country.<\/p>\n

According to Mr Nathan Loyd, chief executive of DN International, a real estate developer, the housing deficit is also related to delays in enacting the mortgage law.<\/p>\n

It took 18 months to get the mortgage law corrected. In the absence of the law, access to both construction and mortgage was difficult.<\/p>\n

“As developers we were affected because we were developing houses we cannot sell; it is difficult to sell without bank’s protection,” he said.<\/p>\n

Stakeholders in the mortgage industry contested sections of the law that required seeking permission from mortgagee before financiers recover their money, in addition to contributing 70 per cent of the mortgage cost.<\/p>\n

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\nRents Shoot Up in Kigali As Housing Deficit Begins to Bite<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

22 May 2011 Nairobi \u2014 Tenants in Kigali have to endure drastic increases in rent due to a shortage of low-cost housing adding to already surging economic woes as households battle rising inflation. Higher food and transport costs pushed up the inflation rate in Rwandan urban centres for the sixth consecutive month in April to 4.98 per cent, the National Institute of Statistics of Rwanda said last week. Rwanda’s overall inflation rate, which has a higher weighting for food, surged more than five percentage points to 3.05 per cent in April from -2.03 per cent in March<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-429588","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-local-news"},"yoast_head":"\nRents Shoot Up in Kigali As Housing Deficit Begins to Bite - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/05\/24\/rents-shoot-up-in-kigali-as-housing-deficit-begins-to-bite\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Rents Shoot Up in Kigali As Housing Deficit Begins to Bite - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"22 May 2011 Nairobi \u2014 Tenants in Kigali have to endure drastic increases in rent due to a shortage of low-cost housing adding to already surging economic woes as households battle rising inflation. 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