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What will happen in Uganda’s real estate market? Will prices go up or down? Is Kampala still a hotspot for foreign investors? How is Uganda’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with notaries, real estate agents, and clients who buy properties in Uganda, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
How this content was created 🔎📝
1) Rental yields in Kampala will rise as housing demand exceeds supply
Rental yields in Kampala are set to rise as housing demand outstrips supply.
Kampala is buzzing with growth, and it's not just the skyline that's changing. The city's population is booming, with an annual growth rate of 5.33%, pushing the number of residents over 4 million. This surge means more people are looking for places to live, and the housing market is feeling the pressure.
Urbanization is another big player here, with a growth rate of 5.61% as the city expands into what used to be rural areas. But here's the catch: the number of new homes isn't keeping up. In hot spots like Nakasero, Kololo, and Naguru, only 600 new homes are being built, which is far from enough to meet the demand.
Existing rental properties are almost full, with occupancy rates hitting 84% by the end of 2023. That's a jump of 6% from the previous year, showing just how tight the market is. With so many people looking for homes, rental prices are naturally climbing.
Adding to the challenge, construction costs are on the rise, making it tough for developers to start new projects. This means the housing shortage isn't going away anytime soon, and the demand-supply gap is only getting wider.
Sources: Knight Frank, Population Environment Research, Macrotrends
2) More foreign buyers will seek properties in Kampala as it becomes a key regional business hub
Foreign buyers are increasingly eyeing properties in Kampala as it emerges as a key business hub in the region.
In 2023, Uganda experienced a notable surge in foreign direct investment, with net inflows reaching 6.1334% of GDP. This influx of foreign capital suggests that a portion could be funneled into Kampala's real estate market, making it a hot spot for international investors.
Kampala's allure is further enhanced by the arrival of multinational companies, which is driving up demand for both residential and commercial properties. As the city gains a reputation as a business hub in East Africa, more companies are setting up shop, increasing the need for housing and office spaces.
Infrastructure development is another key factor. Projects like road expansions and improved public transport are boosting connectivity, making certain areas more attractive and increasing property values. This development is particularly appealing to foreign investors looking for promising returns.
The growing expatriate community in Kampala is also fueling demand for residential properties, especially in prime locations. This trend is making the real estate market even more enticing for those looking to invest in a city with a rising international profile.
With these factors in play, it's no wonder that foreign buyers are setting their sights on Kampala, anticipating that its status as a regional business hub will continue to grow.
Sources: Trading Economics, ODI Production, Kampala Price Forecasts
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Uganda. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
3) Developing properties in sensitive areas will become more expensive due to stricter environmental regulations
Stricter environmental regulations are making it pricier to develop properties in sensitive areas.
In Uganda, the Environmental Impact Assessment (EIA) and Environmental Audit fees have gone up, and these fees now depend on the project's size. So, if you're eyeing a large development, be ready to shell out more to cover costs like decommissioning and monitoring. This ensures that developers are responsible for managing the environmental impacts of their projects.
Take the oil pipeline from Uganda to Tanzania as an example. When projects touch sensitive spots like forests and wetlands, costs can skyrocket. Developers need to comply with regulations that might require restoring damaged areas or taking steps to prevent further harm. This not only bumps up the initial expenses but can also cause delays if the rules aren't met on time.
The National Environment Act has been updated to tackle challenges from big infrastructure projects and urbanization. Now, developers must meet stricter standards, which often means using pricier materials or technologies. These new standards are designed to minimize environmental impact, but they also contribute to the rising costs of developing in sensitive areas.
For anyone considering property development in these regions, it's crucial to factor in these additional expenses. Budgeting for environmental compliance is now a significant part of the planning process, especially for larger projects.
Understanding these regulations and their financial implications can help you make informed decisions. Being proactive about environmental compliance can save time and money in the long run, ensuring your project stays on track.
Sources: EIA Fees Uganda, Sparta Properties
4) Virtual reality will transform property viewing, allowing buyers to explore options from afar
Virtual reality is changing how we view properties, making it easier for buyers to explore options from anywhere.
Back in 2023 and 2024, a whopping 77% of prospective buyers preferred using virtual reality to check out properties remotely. This shift happened because VR tours gave a better feel for the layout, with 65% of homeowners appreciating this advantage. The COVID-19 pandemic really pushed this trend forward, as 67% of home buyers wanted listings with virtual tours. Young adults, especially those aged 18 to 34, were 130% more likely to book a property if it had a virtual tour.
Affordable VR tech is now within reach for more people. For example, in Uganda, the median mobile internet speed increased, making VR more accessible there. This means buyers and agents can view properties without needing to be there in person, opening up more opportunities.
Real estate companies are teaming up with tech firms to make VR even better. These partnerships are changing how we see and interact with properties, especially new builds, by mixing AI with VR/AR tech.
Sources: Numalis, PhotoUp, Market.us
5) Demand for high-rise apartments in Kampala will grow because land is scarce
Kampala is growing fast, and by 2035, the population is expected to hit 7 million.
With more people moving to the city, land prices in central Kampala have shot up, especially noticeable in 2023 and 2024. This has made high-rise buildings a smart choice for developers who want to make the most of the pricey land.
The government is on board with this trend, having supported high-rise construction since 2020. Policies have been set to encourage vertical development, making it easier for developers to build upwards and meet the city's growing needs.
High-rise apartments are becoming a go-to solution for housing because they use land efficiently. They offer more living spaces in a smaller area, which is crucial given the limited land available in Kampala.
As urbanization continues, the demand for housing keeps rising. High-rise apartments are an efficient way to accommodate more people without needing more land, which is in short supply.
Developers are finding that building upwards not only makes economic sense but also aligns with the city's growth strategy. This trend is reshaping Kampala's real estate scene, making high-rise living more popular.
Sources: The rise of modern apartment living: Trends shaping Kampala's real estate scene, Kampala's population to grow to seven million people, Policy Dialogues - Kampala Capital City Authority (KCCA)
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6) Improved road networks will boost residential development in previously hard-to-reach areas
The Ugandan government is heavily investing in expanding its road networks, with Shs 4.989 trillion allocated for transport infrastructure in 2024-2025.
By 2025, Uganda aims to increase its paved roads from 4,971 km to 7,500 km, as part of the National Development Plan III. In the last financial year, 205 km were added to the paved road network, bringing the total to 6,338 km. This expansion is crucial as it covers over 30% of the national road network, enhancing connectivity across the country.
The Uganda National Roads Authority (UNRA) is on a mission to upgrade 2,000 km of strategic roads from gravel to bituminous surfaces. They also plan to construct 600 km of national roads using low-cost seal technologies, which will significantly reduce maintenance costs.
Improved road access is already making a difference. For instance, the completion of the Atiak-Laropi road has made the area more appealing for residential development. Roads like Masindi-Biiso and Rukungiri-Kihihi-Ishasha/Kanungi have boosted mobility and economic activities in their regions.
Strategic infrastructure projects such as the Kampala Flyover and Saaka Swamp Crossing are opening up previously inaccessible areas. These developments are transforming remote regions into attractive spots for new homes.
With these road expansions, areas once hard to reach are now within easy access, making them prime locations for residential growth. The ongoing improvements are not just about roads; they are about creating opportunities for communities and investors alike.
Sources: Roads Boost: Key Roads, Bridges, Ferries Completed in FY2024-2025, Infrastructure Development, Uganda National Roads Authority (UNRA)
7) Demand for eco-friendly homes in Uganda will rise as environmental awareness increases among buyers
Eco-friendly homes are gaining traction in Uganda as more buyers become environmentally conscious.
In 2023 and 2024, Uganda saw a boom in eco-friendly construction, with projects like the Uganda Cancer Institute leading the way by using energy-efficient lighting and rainwater harvesting systems. These initiatives are setting new standards for sustainable building in the country.
There's a growing trend towards using local, natural materials such as mud, clay, and bamboo. This not only helps the environment but also boosts the local economy. As more people opt for these materials, the real estate market in Uganda is evolving.
Surveys reveal that Ugandan homebuyers are increasingly interested in properties that reflect their environmental values. They are looking for homes that reduce carbon footprints and utilize renewable energy, reshaping the real estate scene.
The media has been instrumental in spreading the word about the perks of eco-friendly living. Articles and reports have highlighted the benefits, while the government supports these practices through initiatives like the Uganda Green Growth Development Strategy, which weaves sustainability into urban planning.
Schools are playing a part too, with environmental education programs that are molding future consumers who value sustainability. Social media buzz around eco-friendly living is also influencing consumer choices, making these homes more popular.
Sources: Capmad, Constructive Voices, The Madrona Group
8) Gated communities will become less popular as people prefer urban living experiences
In Uganda, urban living is becoming increasingly popular.
Back in 2023, the urban population was growing at a rate of over 5%, and by 2035, it's expected that 30% of Ugandans will call urban areas home. This rapid shift is driving a demand for more integrated living spaces. People are now seeking vibrant neighborhoods, and mixed-use developments are stepping up to meet this need. Rising property prices in city centers have made gated communities less affordable, nudging residents towards more integrated and budget-friendly options.
The Ugandan government is also playing a role by promoting urban densification. They're rolling out policies to improve urban planning and management, making city living more appealing. Younger folks, in particular, are drawn to urban lifestyles that offer easy access to amenities and public transport. This trend is not just a local buzz; it's supported by media and social media, which highlight the perks of integrated urban living, like community engagement and convenience.
Real estate market analyses are showing a clear shift in demand. People are moving away from gated communities and opting for urban apartments and condos instead. This change is partly because urban living offers a more dynamic and connected lifestyle. The younger generation, especially, values the sense of community and the ease of access to everything they need.
As more people embrace city life, the appeal of gated communities is waning. The focus is now on creating spaces where people can live, work, and play without the need for long commutes. This shift is reshaping the real estate landscape in Uganda, with developers responding to the demand for more integrated urban living experiences.
In the coming years, we can expect to see even more innovative urban developments. These will cater to the growing number of people who prefer the hustle and bustle of city life over the isolation of gated communities. The trend is clear: integrated urban living is the future for many Ugandans.
Sources: Trading Economics, Cities Alliance, African Union, The IGC
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Uganda versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
9) Gulu will become a prime area for residential investment as infrastructure and connectivity improve
Gulu is quickly becoming a top choice for residential investment due to its improved infrastructure and connectivity.
In recent years, the Ugandan government has poured resources into projects like the Tororo-Gulu railway restoration, which received a hefty Sh200 billion investment. This railway project is a game-changer, enhancing transportation and making Gulu more accessible and appealing for both residents and investors.
While specific details on road networks are sparse, the completion of major roads aligns with Uganda's infrastructure goals. These upgrades are expected to boost property values in Gulu, as better roads make the area more attractive. The rising property prices are a clear sign of this trend, fueled by urbanization and a growing middle class eager for quality housing.
Gulu's population has surged from 38,297 in 1991 to 149,802 in 2014, showing a steady influx of people seeking better opportunities. This growth, along with a recovering economy, is driving demand for housing and infrastructure. The urban area of Gulu Municipality expanded from 12.289 km² to 16.606 km² between 2017 and 2020, highlighting the increasing interest in Gulu as a residential hub.
With these developments, Gulu is not just a place to live but a promising investment opportunity. The combination of improved transport links and a growing population makes it a hotspot for those looking to invest in property.
Sources: Government Investment in Infrastructure, Population Growth and Urbanization, Real Estate Trends and Property Prices
10) Property values will rise in neighborhoods with better public transportation links
Improved public transportation systems can significantly boost property values in connected neighborhoods.
When transport links get better, areas become more accessible and attractive for both residents and businesses. We've seen this happen in cities like Tokyo and Singapore, where enhanced public transport systems have driven up property prices. In Uganda, the Busega-Mpigi Expressway is already making waves. It's cutting down commute times, making places like Kiti and Matugga more appealing for those who want easy access to city centers.
These changes mean more people are drawn to live and invest in these neighborhoods. Real estate market analyses are backing this up, predicting continued growth in connected areas. For example, property prices in Kampala are expected to rise by 8% to 12% in 2025, thanks to high demand and limited supply. This growth is likely to be most noticeable in places with better accessibility, like Kololo and Naguru.
In Kampala, the buzz is real. With improved transport, neighborhoods are becoming hotspots for investment. The convenience of getting to the city center quickly is a game-changer, making these areas more desirable. As more people flock to these neighborhoods, property values are set to climb even higher.
For potential buyers, this means now might be the perfect time to invest. As public transport continues to improve, the value of properties in these connected areas is only going to increase. It's a trend that's hard to ignore, especially if you're looking for a solid investment opportunity.
So, if you're considering buying property, keep an eye on areas with new or improved transport links. These neighborhoods are poised for growth, offering both convenience and potential for a good return on investment.
Sources: Knight Frank Uganda, Kampala Real Estate Market
11) Property prices in Mbarara will surge as it grows into a regional trade hub
Mbarara is on the brink of a property boom, evolving into a bustling regional trade center.
One major catalyst for this transformation is the significant investment in infrastructure. The Mbarara City Council, with help from the Uganda Support to Municipal Infrastructure Development (USMID), is busy building roads and bridges like Major Victor Bwana, Galt Road, and Stanley Road. These improvements are making Mbarara more accessible and connected, which is a big draw for businesses and residents.
Property prices in Uganda, including Mbarara, are on the rise. The real estate market is expected to grow by 7.07% from 2024 to 2029, signaling a steady increase in property values. This trend is a green light for investors eyeing Mbarara as a promising market. The government's plan to invest Shs 44.4 billion in Mbarara for the financial year 2024/2025 highlights the city's potential for economic growth.
Improved transportation links and rapid urbanization are key to Mbarara's transformation into a trade hub. The city is expanding, with a daytime population projected to hit 500,000 and 300,000 at night. This growth is accompanied by a surge in business registrations and commercial activity, with over 20 shopping malls and arcades, including international brands like Amazon, setting up shop.
This commercial vibrancy is expected to drive demand for both residential and commercial properties, fueling the property boom. As Mbarara becomes more attractive for businesses, the demand for housing and office spaces is likely to soar, making it a hot spot for property investment.
With all these developments, Mbarara is poised to become a major player in the region's economy, offering lucrative opportunities for those looking to invest in property. The city's strategic location and growing infrastructure make it an ideal place for businesses to thrive and for residents to enjoy a higher quality of life.
Sources: Independent, Statista, Daily Monitor
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.