Housing construction and rental activities contributed a combined output of 11.0 per cent of Uganda’s GDP in 2018 at US$8.46 billion, says an analysis by Centre for Affordable Housing Finance (CAHF).
In its Housing Economic Value Chain analysis, CAHF estimates that in 2018, Uganda invested almost US$ 2.1 billion in the construction of housing, while the total economic value added from residential rental services was US$ 1.1 billion.
“This relatively under-developed rental sector is due to the relatively small proportion of urban households that rent (29 per cent), as well as to the under-developed nature of the rental sector, where most rentals are provided by small-scale and household landlords,” it says.
According to CAHF’s Housing Cost Benchmarking, Kampala has the third-highest construction cost (US$58,596) after Pretoria, South Africa (US$40,199) and Lagos, Nigeria (US$52,103) on the continent.
Construction costs alone are 51 per cent higher than in Pretoria, South Africa, mainly driven by high input costs. Other causes for high cost in the country include process and holding costs incurred due to delays in the development process.
In comparison, based on available statistics, the value of housing construction in Kenya in 2016 was KES 272 billion (US$2.6 billion).
The estimated value chain for housing rental in Kenya in 2016 reflects total domestic production of housing rental and associated services of KES 85.1 billion (US$838 million), making the sector ten times bigger than in Uganda.