On Tuesday 20th October, Shelter Afrique a housing development financier announced that its board has approved the development of the Kinyinya Park Estate Project- a 10,000 integrated and sustainable large scale housing project in Kigali.
The project is expected to cost approximately $400 million will be undertaken in five phases over three to four years, consisting of 10,000 affordable apartments and 200 units of commercial outlets
This is Shelter Afrique’s second large-scale housing development project in Rwanda after the Rugarama Park Estate 3000 affordable housing units commissioned in June 2019.
The intervention comes at a time when the housing sector in Rwanda has been plagued by multiple challenges in both demand and supply aspects limiting chances of home ownership.
This is one of many affordable housing projects that have been announced in recent years but yet to have an impact on the housing deficit.
In 2018, there were high expectations that the cost of mortgages in the country could drop significantly with the $150 million loan from the World Bank Group as well as the government's plans to set up a Mortgage Financing Company.
The funds were to be part of a revolving fund providing affordable mortgage loans to the general public at rates below commercial bank rates as well and with longer repayment periods.
This would be an intervention compared to mortgage loans that are currently in the range of 16 per cent interest per annum which is quite steep for potential homeowners.
With urbanization expected to rise to 35 per cent urban by 2024, the housing demand is expected to rise in coming years.
The annual housing demand was estimated at 31,279 housing units per year against the supply of about 1000 units creating an annual deficit of about 30,000 dwelling units.
Despite the multiple projects that have at times excited potential home owners and years of promise that a solution was on the way, little has changed in the local market with regard to reducing the cost of properties on the local market.
While the growth of projects and initiatives by different parties in affordable housing is a welcome development, it’s probably time that stakeholders in the sector consider setting up an agency whose mandate will consolidate efforts as well as enable the completion of projects that will have an impact on the status quo in the local market.