With Rwanda’s youthful population and growing urbanisation, it is imperative for stakeholders in the real estate value chain to provide affordable housing products and financing. This was highlighted at the first Real Estate Connect event which brought together different players in the industry, financial institutions, innovators, and policymakers, on April 24.

The event aimed at fostering networking and collaboration amongst players in the real estate value chain, holding meaningful discussions, and showcasing different products available on the Rwandan market.

Yves Kayihura, the Head of Retail Banking at I&M Bank Rwanda, commended such platforms that bring together financial institutions and players in the real estate sector to discuss challenges and available opportunities, as well as deliberate on strategies to improve the development of this industry in the country.

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He noted that the government policy of affordable housing takes into consideration not only affordability but also the quality of the houses, the environment, and the people who are going to own homes. Pointing out the government subsidy for developers and commercial banks to finance the development of affordable housing, Kayihura said that I&M bank has availed different products to support aspiring home-owners with low-income.

"The reality of our country is that 65 per cent of the population is young, and if you want to accommodate them, you need to allow a longer repayment period on mortgage for them to be able to afford houses,” he said, referring to the 30-year mortgage loan provided by the lender.

"If you consider a 25-year-old university graduate, if they borrow a house, they are able to pay back within 30 years, but also reduce it to 10 years and 15 years.”

Kayihura also highlighted another product dubbed "Step Up” which allows customers with a flexible repayment method whereby one starts paying a low amount and gradually increases as their income grows.

Additionally, the lender introduced a Home Equity Line of Credit (HELOC) –an amortising loan type product presented automatically to customers who already have a housing loan, allowing them to leverage the equity in their homes for various financial needs.

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Gabriel Ekman, the Managing Director of Lemon Kigali and organiser of the Real Estate Connect event, said the initiative aims to create a conducive platform for Rwandans, the diaspora community, and expatriates to connect to the real estate market of developers, investors, buyers and sellers, among others.

"This is the first event but we are going to be hosting one every six months along the same theme. The sector is already booming and it’s going to continue. It will obviously affect buyers as prices will increase but real estate in Rwanda is becoming more attractive for both foreign investors and Rwandan diaspora investing back into the country.”

He took note of the affordable housing challenge that comes with urbanisation and said that the country’s economy has to grow at the same pace to cater for the industry’s demand.

Grace Uwacu, the Real Estate Specialist at Elimo Real Estate, emphasised the need for data collection in the industry, saying that as much as real estate agents focus on marketing and selling properties, "we need data to provide adequate information for clients to make informed decisions.”

On the point of affordability on the market, she reiterated that financial institutions need to revise the risk assessment criteria to cater for majority of the population considered to be in the informal sector, when it comes to accessing mortgage financing.

Fatima Soleman, the CEO of Mr. Roof, a company specialising in the supply and installation of construction materials, said that advanced government policies are what attracts foreign investors to invest in Rwanda’s real estate sector rather than going for bigger markets in other countries.

Recognising that developers need to make profit, she noted that there are incentives that allow them to invest in diverse range of projects including affordable housing according to the market, hence, it should be prioritised.

The demand for affordable houses in Kigali is rising faster than the supply side, with various studies showing that the city needs at least 20,700 housing units every year or 310,000 units by 2032.

Rwanda Housing Authority (RHA) earmarked 6,100 hectares where the private sector will construct affordable houses as part of a 30-year plan to fix Kigali’s shortage of affordable homes.

Countrywide, projects in the pipeline could help have 15,000 affordable houses built within six years.

Rwanda needs 5.5 million housing units, up from 2.5 million housing units in 2019, to accommodate an estimated 22 million people in 2050, according to RHA.