Real estate dealers and house brokers believe many opportunities such as the growth of business, increase in population, and Mbarara city being the entry point to the western and southwestern region of Uganda have led to the increase in property prices.
Herbert Tushabe, the head of operations at Amity Realtors notes that the price of a plot of land within a distance of 5-10 kilometres from the city centre has more than doubled within the past two years and also its availability is hard.
He says in some areas in a distance of 5-10 kilometres, a plot of land measuring 100x50ft that used to go for Shs 3.5m now costs between Shs 10m and Shs 15m. Whereas land in places about 15 kilometres from the city centre that used to cost Shs 2m now costs Shs 10m.Â
Tushabe says a commercial plot of 25x50ft which used to cost Shs 50m now costs between Shs 100m and Shs 200m and a residential plot measuring 30x40ft now costs Shs 50m.
Tushabe explains that the increase in land prices is a result of high demand as many people who live within the city are making plans to build and settle in the suburbs when the development of the city picks pace.
Alex Turyamusiima, real estate broker says the increase in property rate in Mbarara has affected the prices of land in the neighbouring districts, noting that in greater Bushenyi and Ntungamo, an acreage of land now goes for between Shs 25m and Shs 30m up from Shs 10m, in Isingiro and Kiruhura it goes for between Shs 10m and Shs 20m.Â
However, landowners and brokers say the lack of industries and infrastructure in form of rental houses has somehow affected the would be huge sales of land.
Tushabe says much as Mbarara is developing fast in terms of business making it the commercial hub for the region, it is facing a slow infrastructural development. He notes that investors are scared of constructing rentals because the occupancy population is small arguing that the day population in Mbarara is higher than the one that sleeps around.
He says people prefer going back home after the day’s work, blaming this on the closer neighbouring districts like Isingiro, Rwampara, Bushenyi, and Sheema that are within a distance of 30km.
Agnes Musiime, a real estate dealer also blames the slow infrastructural development in Mbarara on the lack of industries that would attract a population to stay noting that the available employment doesn’t guarantee a person to sleep in Mbarara.
Like Musiime, Tushabe says the rate at which people are buying land and prices doubled has not matched the developing rate, noting that in the last 20 months they have sold several plots of land that have since not been developed, blaming this on the cost of developing land, the price increase of construction materials and the low occupancy rate.
“Over 50 acres of land but in all areas we have sold in the last 20 months, the estate we sell when you go back after maybe 3, 4 or 5 months, there is no development and that is a concern to us. And when you ask people what is stopping you from developing, why are you piling up these lands, for what? They tell you one; they don’t have money, number two the cost of developing it is so high, so they decide to keep money in there and wait for when land appreciated they can resell it. Three if they develop, the occupancy rates, the people to go in there are not available,” said Musiime.
Turyamusiima says that because of the low occupancy rate, rental charges have also since increased, currently, a single self-contained room for rental goes for Shs 150,000 up from Shs 100,000 and a double self-contained goes for Shs 250,000 up from Shs 200,000.
Anthony Asiimire, a surveyor, attributes the increase in land prices to the many people born in the western region who had concentrated on life in Kampala but are now returning, noting that the effects of the Covid-19 lockdown opened the eyes of many to develop back home.
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