Posted on :Wednesday , 10th April 2019
The construction sector in Rwanda is experiencing a huge boost due to the population growth rate of 2.7% annually. The growing demand in the construction and real estate sectors is being experienced by Rwanda on a massive scale.
Every year 28 thousand and 35 thousand housing and commercial units are in demand within Kigali; struggling to meet this need are the developers.
"Taking a significant chunk of the GDP the construction sector has really boomed in various sectors, infrastructure, offices and developments.
We still have a high demand to address on the real estate part," said Patrick Sebatigita, CEO of Ujenge Group and a member of the Young Presidents' Association.
The burden of investing in a real estate project can be felt because of the high interest rates on mortgage says Sebatigita.
"People think to focus on reducing the construction cost but it could be a bit complex than that if we want to address demand" says Sebatigita. He also said that, more than fifty per cent of the construction material is imported for the projects in the region and the East African bloc is trying to compensate by waiving fees for this issue.
To produce finishing materials like flooring or ceilings the government should provide an incentive in the bloc suggests Sebatigita.
The first condominium home was built by Sebatigita's Ujenge Group in Rwanda, “The group faced quite a few challenges while building the first condos fortunately or unfortunately”. But the people were keen on getting condos he said.
Scarcity of space will drive the people of Rwanda to look for options in high rise instead of horizontal housing projects, he theorizes.
In terms of really capturing the market we have a long way to go but the demand is there, Sebatigita adds that the financial package on the mortgage side is still tailored on trade models, as commercial banks are really getting involved in East Africa. Sebatigita thinks that they need to think more inclusively and adapt as the context did not exist before and the transition is pretty slow.