My business is real estate. That’s what I do every day including (and this displeases my family) Sundays. Shortly after moving to Rwanda in 2015, I started a real estate company which specialises in helping both Rwandans and expatriates rent, buy and sell commercial and residential properties.

Now, after more than a year of running a business you begin to understand its environment a lot better.

Rwanda is, in many respects, a young real estate market. Most companies in the sector are relatively new and few real estate agents have either formal training or long years of experience. There are gaps, some of which are obvious, including the absence of a multiple listing service that would allow all real estate agents to view available properties and show these to their clients with a portion of the earned commission going to the agent that listed the property. But all in all the business works, and one can see clear signs of the sector developing and formalising.

These days a common discussion I have with both clients and non-clients relates to the question of whether there is a bubble in the real estate sector here. Many of the folks I talk to say they see signs of oversupply in the market, particularly in relation to commercial space and hotel rooms. And they point, worryingly, to the fact that new buildings continue to go up. Folks are less concerned about the residential property market, where demand and supply appear to be more aligned. On the residential side, the bigger concern is the insufficient number of low-income houses. There are not enough houses within the price range of many lower and middle income Rwandans, especially within Kigali. (For any potential investor reading this article: this is the segment of the market to target!)

This is the general assessment of the situation. Little disagreement. Where the argument begins is on the subject of what will happen next. On one side, there are those that argue that the real estate sector has a bubble and if anything goes wrong in the economy the proverbial house of cards will come tumbling down. On the opposing side are those who also recognise that there is an oversupply of commercial space and hotel rooms but argue that Rwanda has gambled on creating the infrastructure for long-term growth, and it will take a few years for demand to fully catch up with supply. Those in this category point to a range of public, private and public-private investments made in the past decade that will drive growth. They point to investments in areas such as energy, roads, logistics facilities, airplanes, hotels, etc which they believe lay a solid foundation for long-term growth particularly in the services sectors (tourism, financial, etc) but also in industry and manufacturing.

Seen the Kevin Costner movie Field of Dreams? The main theme is that if you build a better ballpark then people will come. There are many who say that if Rwanda continues to lead in terms of stability, peace, security, cleanliness, ease of doing business, and quality infrastructure etc., then private investors and tourists will come. And, the argument goes, in 5 or 10 years, much of the commercial space and hotel rooms will be occupied, incomes and consumer demand will further increase. The glass is half full. Rwanda is building a better ballpark.

These are the two broad camps: the house of cards about to fall versus a better ballpark with more people coming. I won’t attempt to persuade anyone to choose between these views. I have my views and I am unapologetic. I see promise and potential. I believe the path taken by Rwanda and the investments made to attract investments, while not perfect, are fundamentally the right ones. But I also understand the concerns.

From where I sit, I can see that there are areas of oversupply in the real estate sector. And I do wonder sometimes whether some of my landlords have adequate cash to service their loans. I find that I am also increasingly recommending to landlords that they be prepared to reduce the asking price for commercial space over the short-term. The market is real. It lives and breathes like a human being. And it has its own rules and logic. When buyers/tenants are not prepared to pay the asking price, you can either sit on your property for a long time and accept the loss of revenue, or reduce price, get some cash flow, and wait on the market to turn. Many do not seem ready to reduce price, but the market is speaking.

In short, I do believe that the economy is on the right trajectory, and that investments are increasing. Often I meet with investors scouting for opportunities in Rwanda. But there are risks and everyone has a role in managing them. Banks certainly need to be very stringent in assessing the feasibility (and cash flow prospects) of new real estate projects. Investors must focus more on segments of the market where demand is high, such as low-income housing. And landlords must pay heed to the market and be prepared to put their egos aside, recognise sunk costs, and reduce their asking price when necessary. It is better to earn a little than nothing at all. The glass can either be half-empty or half-full.

The writer is a development consultant, and owner and operator of Forrest Jackson Relocation Services.

Twitter: @NatsCR