Why East Africa’s real estate investment scheme failed to excite investors

With inadequate funding for the real-estate sector, property developers are stuck with excessive debt financing, which has prompted capital markets authorities to allow developers to raise cheaper capital through the stockmarkets, instead of expensive commercial bank loans. FOTOSEARCH 

In Summary

• Exorbitant land prices and the high cost of construction materials have made it difficult for regional governments to deal with the housing problems.
• Tanzania and Kenya have annual housing shortfalls in excess of two million and 200,000 units respectively, while Uganda faces a housing shortage of about 2.1 million units per year.
• A 2012 Kigali housing market study projects the city to have a shortage of 352,669 units, a figure expected to hit 458,265 by 2022.

By JAMES ANYANZWA
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East African countries are struggling to attract private investors to the property market through the stock exchanges.

Exorbitant land prices and the high cost of construction materials have made it difficult for regional governments to deal with the housing problems.

Tanzania and Kenya have annual housing shortfalls in excess of two million and 200,000 units respectively, while Uganda faces a housing shortage of about 2.1 million units per year, potentially of reaching 3 million by 2030.

A 2012 Kigali housing market study projects the city to have a shortage of 352,669 units, a figure expected to hit 458,265 by 2022.

With inadequate funding for the real-estate sector, property developers are stuck with excessive debt financing, which has prompted capital markets authorities to allow developers to raise cheaper capital through the stockmarkets,