RE: “Are Kigali developers building for aliens?” (The New Times, March 27).
It seems Kigali is experiencing the same housing market we are also seeing in some North American cities such as Toronto and Vancouver, where the ordinary person is slowly being squeezed out of the housing market by investors mainly from China and Russia. For example, a house that was costing $300,000 eight years ago is now costing close to $600,000.
Both Canada and Rwanda share some similarities when it comes to attracting investors. They are both very peaceful countries and their economies are doing well. This will continue to attract foreign investors into the real estate market, pushing home prices even higher.
In our case, some of the buyers may also be people from the region who already own in houses their own countries and are now looking to invest in Kigali’s real estate market to avoid putting all their eggs in the same basket. These foreign investors will continue to push prices even higher for some time and I am afraid, those ordinary people who are now finding it difficult to enter the market will have to wait a little bit longer and only God knows for how long.
In a hot market like the one Kigali is experiencing, builders cannot miss the opportunity to make handsome profits by targeting the upper market and ignoring the low-income segment.
Unfortunately, even the government is not likely to find it easy to cater for the housing demand from low income earners unless it also takes part in the market.
For example, the government invests in low-cost housing targeting government and private sector employees which it can sell to them at lower interest rates than offered by banks. One way it can achieve this is to look for cheaper land further away from Kigali in areas such as Nyamata.
Given the commute distance for employees in some European and North American cities, Nyamata would be considered a very short commute distance from Kigali centres as long as there is reliable transport system (this can easily be addressed).
It is pretty obvious that developers have been building for a non-existent market, the trend having been set by the pension body using our savings to build white elephants. Don’t they learn? I wonder how they manage to service their loans if apartments are idle.