All sources have been thoroughly verified for credibility. Furthermore, an industry specialist has reviewed and approved the final article.
Everything you need to know is included in our Uganda Property Pack
Are you considering buying real estate in Uganda? Are you questioning if it's a good time to invest?
People hold diverse opinions regarding market timing. Your Ugandan acquaintance might suggest that now is a perfect time to invest in property, whereas your spouse, who is originally from Kampala, might have a different view and recommend waiting for more stability.
At TheAfricanvestor, when we create articles or update our pack of documents related to the real estate market in Uganda, we rely on reliable data and statistics instead of personal opinions or rumors when we work.
We have gone through official reports and government website statistics in great detail. As a result, we have created a reliable database filled with valuable information. Here's what we found, which can help you decide whether it's the right time to buy real estate in Uganda.
We hope you'll find practical value in this article.
How is the property market in Uganda currently?
Uganda is, as of now, a vulnerable and fragile country
Negative
Stability is a necessary condition when investing in real estate because it ensures future planning and financial security. It is an information you need as a foreigner looking to buy a property in Uganda.
Sadly, Uganda is going through a period of great instability. The last Fragile State Index reported for this country is 91.1, which extremely low.
Uganda is currently vulnerable and fragile due to its ongoing political instability, characterized by authoritarian governance and limited political freedoms, which stifles democratic processes and exacerbates social tensions. Additionally, the country faces significant economic challenges, including high youth unemployment and reliance on agriculture, which is susceptible to climate change impacts, further undermining its socio-economic resilience.
It does not seem to be the right time to buy a property in this country. Let's check more data.
Uganda is forecasted to grow massively
Positive
Second thing to do before investing in Real Estate: evaluate the economic situation of the country.
As projected by the IMF, Uganda is likely to finish 2024 with a growth rate of 5.6%, which confirms the country's quick development. Regarding 2025, the consensus estimate is 6.5%.
That's not all - this impressive growth will keep going on since Uganda's economy is expected to increase by 29.6% during the next 5 years, resulting in an average GDP growth rate of 5.9%.
Uganda's expected massive growth means more people will need places to live, work, and shop, driving up demand for real estate. This increased demand can lead to higher property values and rental income, making it a promising opportunity for real estate investors.
Nonetheless, there are other indicators to watch.
Ugandan business owners are a bit less confident when it comes to market conditions
Neutral
How do Ugandans perceive the state of their economy? Relying solely on the GDP forecast might not present a complete picture. Thankfully, in Uganda there exists an official metric that is consistently published. It's not the case for every country, so we're lucky.
The Business Consumer Index (BCI), which relies on surveys and assessments of business leaders, is a metric that gauges their confidence in the present and future economic conditions.
According to the Bank of Uganda's data, the latest Business Confidence Index value is 10 for Uganda. This is a neutral score
Nevertheless, upon closer scrutiny of the data, we uncover a potential negative development: the trend is heading downward. The BCI score, 12 months ago, was recorded at 10.
The current moderate level of the Business Confidence Index in Uganda alone isn't sufficient to make a decision on property investment. We will need to examine additional data.
Ugandan housing prices began to climb
Positive
Uganda's home prices have increased by 11.5% in 5 years according to Uganda Bureau of Statistics.
It means that if you had bought a safari lodge in Queen Elizabeth National Park for $750,000 five years ago, then it would now be worth around $836,000.
These days, it seems like that house prices are starting to increase. This happens after a long period of stability.
It's definitely an encouraging signal. It might be a good moment to enter the real estate market and invest in a property in Uganda.
You can find a more detailed analysis of the real estate prices in our property pack for Uganda.
Everything you need to know is included in our Uganda Property Pack
Uganda's population is growing and getting (a bit) richer
Positive
When considering a real estate purchase, pay attention to population growth and GDP per capita because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
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. Furthermore, the Ugandan population is growing (+20% in 5 years).
This means that, if you purchase a safari lodge near Bwindi Impenetrable Forest and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, there might be a rise in rental demand in Ugandan cities like Kampala, Entebbe, or Jinja in 2025.
Rental yields are average in Uganda
Neutral
Let's now turn our attention to the rental yield.
It's the annual rental income of a property divided by its price. For example, if a property in Uganda is purchased for 100,000,000 UGX and generates 5,000,000 UGX in annual rental income, the rental yield would be 5%.
According to Numbeo, rental properties in Uganda offer gross rental yields ranging from 3.7% and 6.4%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Uganda.
It means that your income potential is relatively moderate.
Everything you need to know is included in our Uganda Property Pack
In Uganda, inflation is projected to remain minimal
Neutral
In two words, inflation is when expenses surge.
It's when your go-to cup of Ugandan coffee costs 10,000 Ugandan shillings instead of 8,000 Ugandan shillings a couple of years ago.
If you're contemplating investing in a property, high inflation can bring you several benefits:
- Property values tend to increase over time, leading to potential capital appreciation.
- Inflation can result in higher rental rates, thereby boosting cash flow from the property.
- Inflation reduces the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, preserving the value of the investment.
- Diversifying into real estate provides stability during inflationary periods.
- Tax advantages, such as depreciation deductions, can help offset the impact of inflation.
As indicated by IMF projections, over the next 5 years, Uganda will have an inflation rate of 1.0%, which gives us an average yearly increase of 0.2%.
This data infers that Uganda is expected to have near-zero inflation then. Unfortunately, buying a property now may not lead to significant price increases or high profits in the future.
Is it a good time to buy real estate in Uganda then?
Let's wrap things up!
Uganda is currently considered a vulnerable and fragile country, but this doesn't mean it's without potential. In fact, the country's economic landscape is on the brink of significant transformation. With an expected economic growth of 29.6% over the next five years, Uganda is poised for an average GDP growth rate of 5.9%. This kind of growth is a strong indicator of a burgeoning economy, which often translates into increased opportunities for investment, particularly in the real estate sector.
This impressive economic growth is likely to spur a surge in demand for real estate. As more people flock to urban areas for work and better living conditions, the need for housing, commercial spaces, and retail outlets will rise. This increased demand can drive up property values and rental income, making real estate a lucrative investment opportunity. For those looking to invest in property, 2025 could be an ideal time to capitalize on this upward trend in Uganda's real estate market.
Moreover, housing prices in Uganda have already begun to climb, signaling a positive trend for property investors. As the population grows and becomes slightly wealthier, the demand for better housing options will continue to rise. This demographic shift, coupled with economic growth, suggests that property values will likely appreciate over time, offering potential capital gains for investors who enter the market early.
Additionally, Uganda offers attractive rental yields, with gross rental yields ranging from 3.7% to 6.4%, according to Numbeo. This makes rental properties a viable investment option, providing a steady income stream. Furthermore, with inflation projected to remain minimal, the purchasing power of rental income is less likely to be eroded, ensuring that investors can maintain their returns. All these factors combined make 2025 a potentially great time to consider buying property in Uganda.
We sincerely hope this article has been helpful!. If you need to know more, you can check our our pack of documents related to the real estate market in Uganda.
-Will real estate prices go up in Uganda?
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.