Challenges, opportunities in Rwanda’s real estate

Rwanda's real estate sector is facing significant challenges when it comes to providing affordable housing for its residents. Despite the rapid urbanization of Kigali, the city still struggles to narrow the housing supply gap, especially for those with lower incomes. At the recent SME and Banking Africa forum, Realtor Natalie Campbell Rodriques discussed the opportunities and obstacles in the real estate space for small and medium enterprises (SMEs) in Rwanda. The issue of affordable housing in the country remains a critical concern, with the definition of what truly constitutes 'affordable' housing being a point of contention. Campbell emphasized that for housing to be considered truly affordable, it must be within reach of the average Rwandan, particularly those in the majority demographic. She highlighted the need to assess affordability based on the ability of university graduates and working professionals to afford a home after a reasonable period. Campbell noted that while the demand for affordable housing in Rwanda is pressing, the high costs involved in construction often deter investors from engaging in this sector. Many developers opt to focus on building properties for expatriates or higher-income earners to generate quicker returns on investment, rather than investing in affordable housing that could benefit the broader population over the long term. The prevailing mindset among developers in Rwanda was also identified as a barrier to addressing the housing affordability issue. Campbell pointed out that developers often replicate projects based on the success of others without conducting feasibility studies or adequately assessing market demand. This approach results in an oversupply of properties that may not align with the current needs of the population. She stressed the importance of developers understanding market trends and consumer preferences to ensure that their projects are viable and meet the actual housing requirements of the target demographic. Vision City, a prominent real estate development in Rwanda, was cited as an example of a project that primarily caters to the diaspora and expatriate community, rather than the local population. While Vision City attracts overseas buyers seeking a retirement destination in Rwanda, the limited affordability of properties within the development restricts its market potential among Rwandans. Campbell emphasized the need for developers to adopt a new mindset focused on conducting thorough market research, building properties that align with current demand, and prioritizing value for money. By shifting towards a more market-driven approach, developers can better address the housing needs of Rwanda's diverse population and contribute to the long-term sustainability of the real estate sector. Despite the challenges faced by the real estate industry in Rwanda, there are significant opportunities for SMEs to create innovative solutions and bridge the affordability gap in the housing market. With the right strategies and a forward-thinking mindset, SMEs can play a vital role in transforming Rwanda's real estate landscape and expanding access to quality housing for all residents.