Real estate state of affairs - a perspective

Quite a stir has been created by the government’s plan to enforce the city’s Master Plan. Since the announcement, the topic has been on everyone’s lips. As a firm believer in town-planning I am not perturbed by the enforcement. The communication and time-frame provided are more of a concern. However, whatever mine or anyone else’s opinion, the government is moving forward. Besides providing a new topic for conversation, the announcement has led to speculations about whether rental prices will fall. There are some who believe that with more available houses, rental prices will come down for residential houses. I agree that rental prices should fall and will fall to some extent but I am cautious. There are a few houses which have been sitting empty since late 2015. Some landlords refuse to lower their price. No amount of advice or showing of data has convinced them to change. If we take a look at commercial rental space we see a similar pattern. The city has a glut of such spaces but the prices have not fallen. Whether it is an old building or a new one, many commercial spaces are being rented at $20 per square metre. Commercial space being empty for two years is not uncommon. A lowering of the rental rate to $15 could have helped to lessen the glut. Given this trend of holding firm to a set price, I am only cautiously optimistic. We have no guarantee that having more houses on the market will lead to a reduction in rental prices. While we wait to see what will happen by March 31st, let us have discussions about the overall state of the Kigali real estate market. It is one thing to be bothered by the enforcement of existing laws but the industry is in need of a major make over on other fronts. 1. The finishing on many houses is of concern to tenants and buyers. The technical training for carpenters and masons needs to be improved to allow for clean edges, smooth surfaces and symmetrically built columns and walls. 2. Neighbourhoods such as Kagugu, Kacyiru and Kibagabaga have many beautiful properties which are sometimes overlooked because of unpaved roads. Within the category of unpaved roads there are those without potholes and those with craters which undoubtedly damage the front end of most vehicles. 3. New construction can be noted all over the city. I overheard someone refer to Kigali as one big construction site - a bit of an exaggeration but the point is taken. Even with all the houses being built there is a glaring gap in the market for furnished houses with gardens in the price range of less than $1500. This gap has led to shared houses being commonplace. 4. Multi-listing services (MLS) help to regulate housing industries. They provide an honest and open way for real estate agents to operate. As it stands, this does not exist in Kigali. Working with agents can either be an experience akin to the Wild Wild West or a pleasure due to the professionalism of the agent in question. Distrust amongst those working in the real estate sale and rental industry has delayed any private initiative to establish an MLS and the government has not moved forward to remedy the situation. 5. Real estate agents should be trained and standards set for the profession. As the industry becomes more mature so too should professionalism be the hallmark of agents working in the field. Rwanda is a relatively new country and so it will take time for all its industries to mature and develop. But, discussions should begin/continue on how best to secure a world-class real estate industry. Enforcement of the Master Plan is a commendable first step but what next? Is this a one-off action or can we look forward to more in the near future? The writer is a development consultant as well as owner and operator of Forest Jackson Relocation Services

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Real estate state of affairs - a perspective