Lower Income Earners Drive Housing Boom in Rwanda, Reports KT Press

    KIGALI, RWANDA, September 19, 2015 /24-7PressRelease/ -- Low income earners in Rwanda could soon control the real estate sector in the country as new indications suggest they are building while big salaried counterparts eat up all their revenues.

Banks and city planners are seeing a growing trend of people earning as little as Rwf 30,000 ($41) saving up Rwf 10,000 ($14) monthly and then ending up building a home in Rwanda's capital Kigali.

"When you afford a plot, you shouldn't worry about constructing a house. You set targets and then build gradually," Engineer Dismas Nkubana has told KT Press.

The case of Michel Nzabahimana is typical. In 1995, the father of six left Southern part of Rwanda for greener pasture in Kigali.

With his earning, Rwf 40,000, Nzabahimana managed to save Rwf 10,000 monthly and acquired a plot after one year and started a construction project.

Two of his three houses, worth Rwf 30 million now earn him Rwf 400,000 worth of rent monthly.

Rwanda is experiencing an increasing demand for homes following a population growth, correlated with increasing earning-now $ 718 GDP per capita compared to $ 211 in 2000.

Kigali alone needs 10,000 new units annually to bridge a-300,000 housing gap. To attract investors the government provided for several incentives to investors. An investor is given construction permit within a week.

An accelerated depreciation rate of 50% for the first year is accorded to investors in construction industry. Any low cost housing project is entitled to a preferential corporate income tax rate of 15% and a subsidy of 30% in form of basic infrastructure like roads and water. This has lured a host of other investors.

Germany firm Strawtec has invested $10 million in manufacturing.

Shelter Afrique, a pan-African finance institution will finance 2000 houses.

The Rwanda Social Security Board (RSSB) is building 3000 units including six storied apartments in the next two years.
The $100 million Vision City project in four phases will provide for 3000 units, costing between Rfw 120 million and 300 million each to cater for the high class segment.

The state agency's 500 villas are overbooked months ahead of completion.

While a number of Rwandans wait for low cost mortgages, people like Nzabahimana are taking over Kigali.

Read full article here: http://ktpress.rw/why-low-income-earners-own-kigali-3099/

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