A few months ago I received an epiphany; it was high time I stopped surviving pay cheque to pay cheque and started thinking about the future. Having come to that life-changing decision, I promptly wrote about it in these very pages (titled ‘Everyone can live the Rwandan dream’). I promised myself (and my readers) to open a savings account and prepare a mortgage plan. Well, I’ve done both so far but I’m starting to meet hurdles that I hadn’t envisaged when I wrote my column back in January. I didn’t know that, even if I did save a few millions, I couldn’t buy a modest house or apartment. But honestly, I can’t.
Lets look at the prevailing housing market and see what some realtors have for us. Every day in the New Times classifieds section, PLUT Properties advertises it wares but I have to ask. Who exactly buys these properties? I mean, the cheapest property is an eighteen million franc house shell! The rest of the houses cost anywhere between 40 million and 90 million! Forget completed houses; just take a look at the prices for undeveloped land. Yes I understand that we are a small country with a large population. And yes I understand that the vagaries of supply and demand and I DO understand that property is a hot market, but I can’t fathom why an undeveloped property in Kicukiro should cost 140 MILLION FRANCS.
But that is the mature of the beast I guess. While I might disagree with the prices, I cannot disagree with the owners’ valuations of their property; it is all within their rights. But while the realtors, landowners and fabulously wealthy folks have a field day, what will become of me and my own dream to call a place my own? Shall I forever live in a rented apartment?
The issue of low-middle income housing has been a hot topic in the last couple of day, especially after the just concluded Property Expo. Everyone, and their momma, is running around looking for solutions to the problem but I must ask, “Why are we reinventing the wheel”? I cannot think of a single nation worldwide where affordable housing is provided by private businesses without state subsidies. Either the housing is build and managed by the government, local or national, or in the case of the United States, the government avails money to commercial banks to provide mortgage loans to their low and middle class customers. While the government does this, private sector real estate developers aim at the upper middle and wealthy class.
I know that it is somewhat taboo to ask for direct government involvement in what should be a free market, but I cannot see another way out of this mess. We won’t be able to find a private investor who wants to build affordable housing. Why? Because it’s AFFORDABLE. A businessperson wants to maximise profit, not reduce it. I’m not asking the Local Government Ministry to enter the business of building apartments, but I AM asking the Social Security Fund, CSS Zigama, Rwanda Development bank and other pseudo-government bodies, which have money just floating about, (not forgetting other captains of industry such as Crystal Ventures, Rwanda Investment Group) to get involved in this property market. Yes, Pension Plaza looks good, but, as a social security fund contributor, I would much prefer a block of apartments instead.
If nothing is done I, and the vast majority of Rwandans, will simply have to scrounge and skimp, until we too can afford to actually own a home. And looking at some of the prices out there, I will move into my new home when I’m on the wrong side of fifty. Woe is me.