The recent halting of land prices in Kigali City by government has been attributed to the move by government to attract more investors.
The Minister of Environment and the Natural Resources Stanislas Kamanzi, said that the prices of land in Kigali should not jump too high to discourage investments.
Recently, a Cabinet meeting chaired by President Paul Kagame halted the current prices of land in Kigali City.
The prices, which were set by the Minister and the city council, had led to speculation which led to some plots shooting up by as much as ten times their actual value.
The government has set up a task force to draw up new guidelines and rates. In the meantime, the old rates will apply. Kamanzi said the move will also protect land owners who are likely to get stuck with their property as high prices may make it less appealing.
“We are regulating land to facilitate investment and to protect landlords who should also be able to sell their land in order to create wealth”.
The Minister said the prices applied by Kigali City on the expropriated land had been set to high. He said the new arrangement will distinguish between the real value of land from the cost of investment in public utilities which the buyers can reimburse over a period of time.
He said the new prices will not remove the willing-buyer-willing-seller arrangement, but will act as a point of reference and will provide for a window for negotiations.
Stakeholders speak out
The New Times, has sought a land price structure from Kigali City for the last three weeks with no success.
However a city official talking on condition of anonymity stated that a square metre of land in lower Kiyovu is at Rwf, 15 000 while upper Kiyovu is at Rwf, 25,000.
“In the previous figures quoted by Kigali City, a 30x40 metre plot in upper Kiyovu was Rwf 100 million,” he said.
“This implies that a sq metre would go for Rwf 83,333. Upper and Lower Kiyovu constitute part of Central Business District.
He contends that land prices in Kigali are relatively lower compared to other East African cities.
“But government can decide to lower the prices further in the interest of development;” he said adding that “people can be expropriated to pave way for hotels, schools which in turn create employment for them.”
But another source familiar with land matters in Kigali disputed the authenticity of these figure saying the official “is either not aware or is just being mean with facts.”
“It’s not the individuals alone who are being speculative on land. The City of Kigali, last year expropriated land in Kiyovu and I can assure you, they have priced it at Rwf 80,000 per sq metre,” he said.
When sought for comment, Nathan Loyd, the Managing Director of DN International, a real estate developer in Kigali City, said that a square metre of land in Gasabo is priced between Rwf 2,000-2,500.
If you factor in the cost of infrastructure, Loyd argues, “the unit price of a house will be high and therefore not in the reach of low income earners who constitute the biggest market niche in this country.”
Normally, land is priced using comparative methods; land adjacent to a good road network, water, electricity connectivity and other social amenities will fetch more money for the proprietor and the reverse is true.