Rwanda is a landlocked country in East Africa with a landmass of 26,338 square kilometers. It is the smallest African mainland country with a population of approximately 12.6 million. Despite its small size, Rwanda has seen consistent growth in its population. This is bolstered by the country’s equally growing economy. In a 2019 report, Rwanda ranked 3rd among the fastest developing economies in the world. The report also gives a projection of 8% growth in GDP between 2018 and 2021. This is a great leap for the Nation considering the impact of the 1994 genocide on its economy.
The article will introduce our readers to one of the fastest-growing sectors of Rwanda’s economy and how to invest in it. Rwanda’s economy is agriculture-based. However, the country has over the decade, seen a significant boost in other sectors like real estate contributing significantly to its GDP. The main reason for this is that the government is now focusing on reformation and infrastructural development.
Is It Safe To Invest In Rwanda?
Gone are the days of civil wars and genocides for which the country of Rwanda was known for. The World Economic Forum (WEforum) ranked Rwanda as the 9th safest country in the world in 2017. The result of this is evident in the strong economic growth of the nation over the past decade. Consequently, the Nation is currently experiencing a spike in population.
According to the World Bank, the annual population growth rate was 2.6% in 2019. Also, the government is making efforts to attract foreign investors to the country. Its foreign policies are attractive to investors who are willing to take a stake in the rapidly growing economy of the Nation. One of such economic sectors that have strong government support and a promise of huge turnover for investors is “Real Estate”.
Why Should You Invest In Rwanda’s Real Estate?
Real estate and construction contributed 14.8% to the country’s GDP in 2017. Taking a close look at the growing population, it is easy to see why. Rwanda has one of the highest urban population growth in the world. Its annual urban population growth rate was 3.2% as of 2019.
The urban population growth rate is a measure of the rate of urban migrations. Rwanda is not the only country facing a sudden rise in urban migration. According to this report, 55% of the world’s population lives in urban areas. This number is expected to rise to 68% by 2050. If this projection is accurate, then you can only imagine what this means for a country like Rwanda.
Already, Kigali (the capital of Rwanda) is facing the challenge of the housing shortage. With so many people heading to the cities, finding suitable and inexpensive accommodation becomes a problem. This may be bad news for the government but it’s great news for investors looking to invest in a thriving real estate market.
How The Government Is Making Rwanda Real Estate Investment attractive to Investors
Affordable Home Project
In a bid to address the impending population crisis, the Rwanda government is taking steps to create more “affordable homes”. To achieve this, the government is collaborating with investors by providing lands for the “affordable home” project. The aim of this collaboration is to lower the high cost of building a house in Rwanda. The terms and conditions of this collaboration can be seen here. So, depending on your budget, you can either own the land and build a house for rent, or join the affordable home project where you can build on a government allocated land.
Secondary Cities Available For Real Estate Developers
In a bid to expand Rwanda’s real estate, the government is earmarking 6 cities for real estate development. These are secondary cities and include; Rusizi, Rubavu, Musanze, Huye, Muhanga, and Nyagatare. These cities are meant to carry the extra socioeconomic burden as well as urban migration of the capital city. Thus, these 6 cities are a heaven for investors.
Kigali Innovation City—The Silicon Valley Of Africa
Another ambitious project that makes Rwanda’s real estate investment a mouth-watering option is the Kigali Innovation city project. For this purpose, the government is setting aside 70 hectares of land. This is for the establishment of world-class universities, companies, research facilities, and residential complexes. Kigali innovation city will push the country to the forefront of science and technology in Africa and the world at large.
The growing interest of international investors in Rwanda is an indicator of its thriving economy and business opportunities. In 2019, the first Rwanda-Luxemburg Bussiness Forum was held to showcase the many investment opportunities in the country. Among the attendees were 15 companies from Luxemburg with interest spanning areas of ICT and innovation, Infrastructure, manufacturing, and yes, real estate. All this points to the fact that investing in Rwanda’s real estate development is a profitable venture for any well-meaning investor.
How To Invest In Rwanda Real Estate
Two ways you can invest in Rwanda’s real estate are;
#1. Through the government
#2. Through accredited investment firms
#1. Investing In The Affordable Home Project
For foreign investors with little or no lay of the land, the best route is to either go through the government or an accredited investment firm. The government website provides hints on the incentives and procedures for the affordable home project. The government together with private investors hopes to provide 150,000 affordable housing units annually. The aim of this project is to provide sufficient accommodation for 22M people by 2050. For further inquiries, you can reach the Rwanda Development Board via Email or Telephone.
#2. Investing In Rwanda Real Estate Through Accredited Firms
Investment firms can help pave the way for your real estate investment in Rwanda. One advantage of this is that they help you bear part of the burden. This includes doing the necessary research work to find out which areas will bring the highest yield to its investors and fact-checking the properties. Notable real estate firms include Cytonn Investments. Their focus is on East Africa with offices in the United States and Nairobi.
You can also take a look at Vibe house, a real estate agency in Rwanda that helps investors buy, rent or sell properties. The agency will often verify the owners of these properties and all relevant documents before listing them on the website. Unlike Cytonn investments, Vibe house gives you a more hands-0n approach. You are directly involved in the process of buying and selling.
(Please note, African vibes magazine has no affiliations with these firms)
Steps To Follow
#1. Get a land
Your real estate investment journey begins with acquiring land in any of the choice locations in Rwanda. While most investors have their eyes on Kigali, there are other cities in Rwanda that are also great choices. To acquire land, you can access a list of properties in Rwanda through a real estate agency. The agencies often provide relevant information like the contact address of the landowners. This is really helpful for a foreign investor with little or no knowledge of how to begin. Also, the government provides a way for investors to get the information they need. You can access this information using the links below;
Get all relevant information about land for sale in Rwanda here.
Get an idea of land prices in Rwanda here.
#2. Verify Documents
After acquiring land, the next step is to obtain and inspect the proof of ownership from the seller. Again, this step is often done by the real estate agency before listing the property on their website. However, if the property is not on an agency’s website, then you can use the official government channels to verify the land owner’s document.
#3. Validate Your Purchase
You should then proceed to sign the “Agreement of Sale” contract. You may have to deposit a certain amount of money.
#4. Visit The Local Administrator
The next step is to visit the local administration. You will have to provide your passport and make a full payment for the property. The seller will do the same and where applicable, the company registration papers are provided. Every other relevant document will be provided as requested by the land officer. In a situation where you are buying the property for yourself and your spouse, both parties have to be present. If the second party is not present, you will have to present a signed power of attorney from them with a copy of their passport.
#5. Sit And Wait
When all the documents have been verified by the land officer, the process of ownership transfer will begin. It takes between 1 – 2 weeks for the whole process to be completed.
Rwanda’s real estate has a promising future. However, there’s something worth mentioning—the cost of building in Rwanda is high. So, most investors focus on developing properties that meet the needs of high-income earners. The government intends to tackle the problem by reducing the cost of construction. To do this, it hopes to support the production of locally made Rwanda building materials like cement.
Considering the growing middle class, most people will be searching for affordable homes. This is why the government is liaising with investors to provide low-cost homes. We believe that with the new policies and reforms in place, it is easy for investors to kick-start their real estate journey in Rwanda. If you have any questions about investing in Rwanda’s real estate and construction, kindly drop them in the comment section below and we will do our best to answer them.