Bank of Uganda, UBOS to collect data on real estate

The New Vision, Thursday, 26th May 2011

THE Bank of Uganda has teamed up with the Uganda Bureau of Statistics (UBOS) to collect data on the prices of real estate to bolster the supervision of the construction sector.

“The rising prices of land and housing are partly the reason that the West had a financial crisis.

“We are partnering with UBOS to capture the average price of land to analyse the risks that the construction sector poses to the financial sector,” said Robert Mbabazire, the Central Bank assistant director at the supervision department.

He was speaking at the release of the 2010 annual Bank of Uganda supervision report where he pointed out that loans to the building and construction sector had risen, driven by mortgage lending and loans to property developers.

The report indicated that commercial bank lending to the building and construction sector rose by 27% to sh1 trillion in December 2010, up from sh771b registered earlier in the year.

This showed increased exposure by the commercial banks to the construction sector.

Mbabazire explained that the Bank of Uganda would set up a real estate price index to monitor prices in partnership with UBOS.

“We shall start with a survey of properties in Kampala and then gradually spread out to the entire country,” he added.

Despite the challenges, the real estate industry continued to attract the attention of more local and foreign investors in 2010. More industrial innovations were also witnessed last year.