The real estate industry in Rwanda is constantly evolving. A mere three years ago there were few apartments and townhouses throughout the city. Now, there is a large number of these kinds of housing. The days of the big houses being the in-thing are behind us. The idea of building a 6- or 7-bedroom house to be used as a rental property now seems outdated and irrelevant. Longer term mortgages are now more readily available for the qualified buyers and the savvy buyer is looking to capitalise on prospects for home ownership. Those in the real estate industry trying to market apartments and townhouses will readily tell you that these housing options are not attracting the local Rwandan buyer. However, Rwandans and other Africans in the Diaspora, along with many foreigners, are using the opportunity to own a piece of the new Rwanda. The question begs to be asked; “when will Rwandans living in Rwanda get onboard and not let everyone but themselves own these properties”? Changes take a while and it seems the local culture is for home ownership to have houses with a garden and yard space for offspring to run around. In addition, the local norm is that one saves until they can build their home and, until then, the expectation is that you live with your parents or in a house owned by the family. That is great, but how much potential wealth creation is being lost during this time? Studies have shown that, with the rate of population growth expected in Rwanda over the next few years, there will be no choice but for housing options to be ground plus one or two or maybe even more. The big sprawling house with a garden to host a dinner party for 50 will be a rarity. Driving through neighbourhoods such as Nyaruturama and Kimihurura one can see that some of these lavish homes are being transformed into apartments or townhouses.The trend is clear and to avoid what has happened in cities such as Singapore, Vancouver and Washington D.C., locals need to ensure they get in on the ground floor before the cost to own one of these spaces gets even more out of reach. Talk to anyone from Vancouver who did not buy property ten years ago. They will tell you it is one of their biggest regrets to not have invested in real estate when it was more affordable to do so. That city has had to legislate to curb the rate at which foreigners are owning property versus locals. Rough projections are that over the next five to ten years, real estate in Kigali will significantly increase in value. A three bedroom apartment or townhouse which can be bought for between Rwf80 million and Rwf140 million in today’s market will be of an even higher value in 2023 or 2028. Not only will it be more expensive to own but the opportunity to have built useable equity in that property would have been lost. That is almost like throwing money down the drain. Owning a piece of real estate is not just about having a home; it is an investment in the future – a wealth creating mechanism. Staying in a family home until marriage does not mean property ownership should be delayed. Buy something and use it for rental income then sell or keep it when the time comes to build the dream house. Use the equity gained to do other things. Why pay rent for 10 or 15 years to live in a larger than needed house rather than use that same rent amount to own something more modest which can be leveraged for future use? The questions which should be on the minds of those who do not own a home is, “How much real estate can I afford?” Long term mortgages have helped millions of people across the globe to own property but the concept is relatively new in Rwanda. Twenty-year mortgages are now available and, if utilised properly, can help to realise dreams and create wealth. Will the way things have always been done be the reason Kigali becomes the next Vancouver or Washington D.C.? Will Rwandans find themselves in the next decade renting mainly from foreigners because the opportunities were ignored? The writer is owner and operator of Forrest Jackson Properties Ltd. Twitter @NatsCR. The views expressed in this article are of the author.
