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The real estate sector in Uganda has seen Property developers who have recently entered the market and have innovatively teamed up with a number of local and international banks present in Uganda to extend mortgage services to a number of Ugandans.

Companies like the Government owned National Housing and Construction Corporation and Private Property Developers like Akright Projects, Kensington Real Estate Company, Tirupati Developments, Pearl Real Estate Developers and Jomayi Property Consultants have worked out schemes through which middle income earners can access loans for the purchase of real estate through banks.  Despite of all the above, the residential, commercial and office buildings that the real estate developers have built remain with a 50-70% occupancy, For example, Kizito Towers, Kalungi Plaza, Mbabirizi Complex, Kirumira Towers, Ivory Plaza and King Fahad Plaza have most of their top most floors unoccupied.

Uganda’s prime rents have declined by up to 20% from a decade ago on the back of increased supply which caused the half occupancy of these buildings. Prime office rents averaged $16 a square meter while yields remained at 11%. The retail segment continued to attract the highest rents at 25$ a square meter but yields were lower 10%. In 2008. Currently as of 2016, office rental prices in Muyenga go for $8-$10 (per square meter). In Buziga, one of the suburbs in Kampala, building on an 11 decimal stand on sale asking price is 600million shillings’,  currently a four bedroom house in a prime location like Kololo brings $5000 in rent per month and a return on investment of 8% from the $1000-2000 of rent.  By keeping the rental fees consistently high, it’s obvious that property owners run the risk of affecting demand and alienating potential and existing tenants


Mortgage Financing in Uganda.

A mortgage is a debt with income producing property such as retail space, office, hotel or multifamily building as collateral.  Furthermore, a mortgage can be both the instrument that pledges real estate as a security for an obligation and the process of pledging real estate as security.  This means that a mortgage can apply to any sort of property say a car, land or even a building. It is any encumbrance, charge, debenture or loan agreement, whether legal or equitable, that constitutes a charge over an estate or interest in Uganda and is registered under the Registration of Titles Act.

The mortgage market comprises of primary mortgage market and secondary mortgage market. Primary mortgage market is the market which involves origination and servicing of mortgage loans secured by real estate. Mortgage secondary market on the other hand allows mortgage originators to sell mortgages that they do not wish to hold in their portfolio and allows ultimate investors to hold mortgages assets without becoming involved in the mortgage origination and servicing.

 Types of Mortgages

 There are a number of different types of mortgages, but the most common are the fixed rate mortgages and the adjustable rate mortgages. Fixed rate mortgages are those where the creditor/investor assumes the interest risk while there is typically no prepayment penalty for the borrower; adjustable rate mortgages, hybrid mortgages or interest only mortgages. Fixed rate mortgages are advantageous because the monthly repayment is constant for the term of the mortgage and regardless of the behavior of the market interest rates, the interest rate paid by the borrower is the same for the life of the loan. However, with adjustable rate mortgages, the interest rates are lower than on otherwise equivalent fixed rate mortgages.

Different banks offer various mortgage solutions among which include: Stanbic Bank Uganda (, Bank of Africa Uganda (, DFCU bank ( among others.