Buying a property in Kampala: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Kampala's property market is included in our pack

Wondering about investing in real estate in Kampala? You're not alone!

Many people are captivated by Kampala's African charm and dream of owning a comfortable villa or a modern apartment in this city.

Does it make sense, though? Are property prices increasing in Kampala? Is it expensive? Should you consider investing in Kololo or Ntinda? Are there any hidden fees? Where are the best rental yields?

In this article, everything is sorted out for you.

At TheAfricanvestor, we've extensively researched this market; Actually, we've put all our findings together in a pack. Get it now.

In this article, we'll provide you with helpful information.

How's the real estate market in Kampala?

Confused about the property market's status? Everyone has their views. We prefer data and statistics over opinions for accurate assessments.

Property types

In Kampala, you can find a variety of properties for sale, including apartments, houses, commercial buildings, and vacant land.

Apartments offer convenient urban living with various sizes and amenities. Houses come in different styles and sizes, suitable for families or individuals.

Commercial buildings are available for business ventures, while vacant land provides opportunities for development or investment.

Each type of property offers unique choices for buyers in Kampala's real estate market.

Buy or rent?

(If you plan to use it yourself and not as a rental)

If Kampala is your city of choice, you may be thinking about the advantages of buying versus renting a property in this bustling capital city of Uganda.

Without a doubt, you should buy if you want to acquire equity and have more control over the space you live in.

Actually, the property price-to-rent ratio is a good metric to look at for this kind of decision. It's like a measure of how much rental income you'll need to afford the property at its current value.

According to Numbeo, the property price-to-rent ratio in Kampala is around 14.13, which is below the world average.

Simply put, on average, you could buy a property with just 14 years' worth of rental payments. Worth buying.

Property prices in Kampala

On average, according to the last data from Uganda Bureau of Statistics, purchasing a property in Kampala would cost you around $1,260 per square meter.

Naturally, prices are quite spread out. The value of a square meter for a city-center apartment in Kampala might differ from a suburban home in Ntinda. You'll get a more detailed in our pack for buying property in Kampala and in Uganda.

To put things in perspective, it means that, instead of buying an apartment in Paris or London, you can afford 11 properties in Kampala.

Moreover, housing prices in Kampala are way cheaper (-67%) than in Dar es Salaam.

The most expensive neighbourhoods in Kampala are probably Naguru, Kololo, Muyenga, and Bukoto, while the cheapest neighbourhoods are likely Ndejje, Kisaasi, and Bweyogerere.

Trends

First and foremost, we have to acknowledge that Uganda is, as of now, a vulnerable and fragile country. The last Fragile State Index that has been reported for this place is 92.1.

It is something to have in mind when wondering whether it's a good investment to buy a property in Kampala.

If we look at more data, we can see that, according to the IMF’s forecasts, Uganda's economy is expected to soar by 29.4% in the coming 5 years, resulting in an average GDP growth rate of 5.9%.

If you want to invest in real estate in Kampala it's a good thing because, usually, when the economy grows, people make more money, and this encourages them to invest in real estate, which drives up the demand and prices for properties.

Also, in Uganda, the average GDP per capita has changed by 4.3% over the last 5 years. It's not much, but the growth is here.

This trend can lead to a rise of property prices in Kampala over the course of 2024 and also later on.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Uganda right now.

Buying property in Kampala

Buying real estate in Kampala can be difficult due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in Kampala and in Uganda.

Buying process

Within our pack, we have outlined the complete buying process. This includes the necessary documents, the applicable taxes, as well as information about where to locate properties, and more.

Here, we are providing you with a simpler version to assist you in better comprehending the information.

This is the step-by-step process to purchase a property in Kampala:

1. Determine your budget and property preferences based on Kampala's real estate market.
2. Engage a reputable local real estate agent familiar with Kampala's neighborhoods.
3. Research properties and schedule viewings, considering factors like infrastructure and security.
4. Verify the property's ownership with the Land Registry and obtain a Land Title (Title Deed) search report.
5. Negotiate the price and terms with the seller, taking cultural customs into account.
6. Draft a Sales Agreement, signed by both parties and witnessed by local authorities.
7. Pay the agreed deposit into an escrow account for security.
8. Conduct due diligence, including a Land Survey and Physical Planning inspection.
9. Secure financing and obtain a mortgage, if necessary, from a local bank.
10. Complete the property transfer at the Land Registry, accompanied by a Transfer Form and Stamp Duty payment.
11. Pay the outstanding balance and all applicable taxes and fees, like Capital Gains Tax.
12. Receive the Land Title (Title Deed) in your name and take possession of the property, accompanied by a local lawyer to ensure compliance with all local regulations.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Uganda.

Make a profitable investment in Kampala

Better information leads to better decisions. Save time and money. Download our guide.

Download Now

Where to find a property

Looking for properties in Kampala, Uganda? These websites can help:

• Estate Ridge - A real estate company providing assistance in buying, renting, and investing in properties. They offer a wide range of properties in various areas and price ranges.
• Musbon Real Estate - A registered real estate company in Uganda, specializing in prime real estate sales, brokerage, property management, renovations, and construction.
• Habita - An international real estate company offering property search, buying, selling, renting, and commercial business brokerage services.
• Real Estate Database - Uganda's largest property database, offering verified listings, real estate services, and resources for buyers and sellers.
• Lamudi - Provides property listings and resources for buyers and sellers in Uganda.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Uganda.

Which properties for which budget?

As mentioned before, the average price per sqm in Kampala is $1,260. A one-bedroom property with 60 square meters of space would cost approximately $76,000, while a two-bedroom property with 85 square meters of space would cost approximately $107,000.

However, the cost of properties will fluctuate depending on both their characteristics and their location.

Fancy neighborhoods in Kampala usually have higher prices. A villa in Kololo might cost around $310,000, and a house in Nakasero could be about $220,000.

On the other hand, certain areas are friendlier to your budget. You may find an apartment in Bwaise for $40,000, or an apartment in Nateete priced only at $30,000.

Find a more detailed breakdown in our full pack for buying property in Uganda.

Common mistakes

Here are the main pitfalls when buying property in Kampala, Uganda:

• Unclear land tenure system and customary land conflicts prevalent in some areas.
• The risk of purchasing property on leasehold land, with lease terms potentially causing problems in the future.
• The presence of "ghost titles" - fake or forged land titles - leading to legal issues and loss of investment.
• The challenge of accessing financing for non-residents due to strict regulations and limited options.
• The possibility of encountering informal settlements, which lack proper infrastructure and pose investment risks.
• Difficulties in verifying land ownership due to insufficient and outdated land registries.
• Risk of investing in properties on wetlands or ecologically sensitive areas, which may lead to demolitions and losses.
• Ongoing land disputes and land-grabbing issues resulting from urbanization and population growth.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Uganda Property Pack

Living in Kampala

Kampala is a vibrant and diverse city, with a range of property options to suit every lifestyle and budget.

Cost of living

The cost of living in Kampala is generally lower than in other major cities in the world. Prices for basic goods and services are relatively low, making it a great place to live for people on a budget.

Here are some examples to better understand the cost of living in Kampala:

• Rent for a one-bedroom apartment in the city center: $300-$600 per month.
• Monthly utilities (electricity, water, internet): $50-$100 for a standard 85m² apartment.
• A meal at a local restaurant: $2-$5 per person.
• Boda-boda (motorcycle taxi) ride for short distances: $0.50-$1.
• Groceries for a week (milk, bread, vegetables): $15-$25.
• Local beer (0.5L bottle) at a bar: $1-$2.
• Gym membership: $20-$50 per month.
• Movie ticket: $3-$5.

Neighbourhoods

We want to make it easy to understand the information we present. So, we made a table that shows the different areas of Kampala. For yields, prices and rents, check our property pack.

Life in Kampala

Kampala is the capital and largest city of Uganda, and the economic hub of the country. It has a diverse economy, with sectors such as tourism, manufacturing, finance, and IT, as well as a growing real estate market.

What expats usually like the most in Kampala is the city's vibrant nightlife, with many bars and restaurants offering international cuisine, as well as the city's rich cultural heritage and its many attractions.

A good point for a property investor - Kampala has a mass rapid transit system known as the Kampala Capital City Authority Bus Rapid Transit (KCCA BRT).

Access to healthcare in Kampala is limited, with inadequate resources and limited access to quality healthcare.

Don't lose money on your property in Kampala

100% of people who have lost money in Uganda have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.

Download Now

Renting out in Kampala

If you're interested in buying property not to live in, but to rent out and generate income, this section is for you.

Long-term

Tenant Profiles in Kampala

If you decide to buy and rent out to long-term tenants, you should target young professionals, students, expatriates, and families looking for affordable housing in Kampala. There is also a growing demand for luxury apartments from wealthy locals and expatriates.

Here is a little summary table we've made for you.

Rental yields

As of today, rental yields in Kampala are quite low, below 2% that's for sure. Among other things, this low performance can be explained by the limited availability of quality rental property in Kampala, resulting in low demand and low rental yields.

In Kampala, rental yields are highest for properties located near the city centre and in areas with good transport links, as these are more desirable locations for tenants. Properties in residential suburbs with amenities such as shops, restaurants, and other services also tend to have higher rental yields.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Short-term

You could also decide to rent short-term to business travelers, expats, and tourists visiting Kampala. Additionally, students attending universities in Kampala may be interested in renting short-term as well.

If you decide to go with that option, look for properties in the Nakasero, Kololo, and Bugolobi neighborhoods. These areas are well-connected, have plenty of amenities, and are popular with tourists looking for short-term rentals.

Currently, there are approximately 5,000 active Airbnb listings in Kampala, reflecting a highly dynamic and bustling short-term rental market. The average daily rate is at $43.

You have the opportunity to generate some additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Kampala can make around $300 per month. Also, the average occupancy rate is estimated at 31%.

Is it worth buying real estate in Kampala then?

When it comes to buying property in Kampala, Uganda, it all boils down to your specific circumstances and objectives.

If you're planning to make Kampala your long-term home or want to invest in a city with potential, buying property can be a smart move. The property price-to-rent ratio in Kampala is favorable, which means you can own a property for less than you might spend on rent in other cities. Additionally, the relative affordability of property, with an average cost of $1,260 per square meter, makes it an attractive option. You can tailor your investment to your needs, whether it's a family house, a modern apartment, or a rental property to generate income. The projected economic growth in Uganda also bodes well for real estate investment.

However, if you're looking for a short-term stay or lack reliable local information and expertise, buying property in Kampala might not be the best choice. The market can be challenging to navigate, and property-related challenges, such as unclear land tenure systems and the risk of purchasing leasehold land, can lead to legal troubles. There are also potential financing challenges for non-residents.

Furthermore, Kampala, as a developing city, faces economic and political risks that can impact property values. So, while buying property in Kampala has its merits, it's essential to weigh the pros and cons carefully, consulting with experts and conducting thorough research before making any commitments.

Make sure you understand the real estate market in Kampala

Don't rush into buying the wrong property in Uganda. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

Download Now

The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.