Real estate markets are, at their core, mirrors of the economies they sit within. In advanced economies, that mirror reflects a relatively stable image: steady credit markets, predictable consumer demand, mature institutions, and long-established urban growth patterns.
But in developing countries like Uganda, the mirror behaves differently. It shifts quickly, exaggerates shocks, and amplifies every policy misstep, every currency wobble, and every change in global liquidity.
This is a sector whose fortunes rise and fall not on neighbourhood gossip but on macroeconomic tides.
“In Uganda, the macro is the weather system,” says Moses Lutalo, Managing Director of Broll Uganda. “It decides whether a project survives, fails, or never leaves the drawing board.”
His metaphor is apt. In economic theory, real estate is classified as a derived-demand sector: people do not demand office space for its own sake; they demand it because their businesses are growing, because employment is rising, because incomes are expanding.
Housing demand, too, is tied to income elasticity and urbanisation rates. Thus, to understand where Uganda’s property market is heading in 2026, one must begin not with land prices or yields, but with macro fundamentals.
An economy in forward gear
Uganda enters 2026 not in an economic boom, but in something more durable: broad-based, steady momentum, as preliminary macro indicators from the Bank of Uganda suggest as of November.
According to the latest Ministry of Finance data, GDP expanded by 6.3% in the 2024/25 financial year, up from 6.1% the previous year.
Projections for 2025/26 stand at 7%, and Treasury officials continue to hold the ambition of double-digit growth by 2027.
In development economics, this kind of steady, compounding growth builds the middle class that underpins sustainable real estate demand.
It expands the consumption base for retail, enlarges the labour force for industrial development, and ultimately raises the number of households able to afford mortgages or formal rentals.
Inflation, another critical macro variable, remained controlled at 3.8% by June 2025, well below the Bank of Uganda’s 5% threshold.
Low inflation matters because real estate is highly sensitive to input-price shocks.
As Lutalo notes: “For developers, stability means fewer unexpected cost shocks; for households, it means real incomes erode less quickly.”
Price stability preserves purchasing power and lowers the risk premium investors demand.
Business sentiment indicators reinforce this macro narrative. The Purchasing Managers’ Index (PMI), a forward-looking gauge of private-sector health, jumped to 55.6 in June 2025 from 49.5 in January, while the Business Tendency Index (BTI) hit 59.17.
In classical macro modelling, PMIs and BTIs lead investment cycles. Rising PMIs correlate with increased hiring, higher imports of machinery, expanding inventories, and ultimately more space required for production, distribution, and administration.
Uganda’s macro story becomes even more compelling when viewed internationally.
Global Foreign Direct Investment (FDI) has been declining since 2023 due to rising interest rates and geopolitical tensions.
Yet Uganda recorded a 25.4% increase in FDI in Q1 of the 2024/25 financial year.
Why? Because investors reward macro stability. Oil-and-gas momentum, participation in the Africa Continental Free Trade Area (AfCFTA), and significant progress on compliance under the Financial Action Task Force (FATF) regime all boosted confidence.
Currency stability: The unsung hero of real estate
Real estate is arguably the sector most exposed to foreign-exchange fluctuations. Construction materials, from cement additives to fixtures and elevators, are heavily imported.
Financing structures often assume stable exchange rates, especially when landlords charge rent in dollars or index leases to the dollar.
Against this backdrop, Uganda’s currency performance was exceptional. The shilling appreciated against the US dollar over the past year, lowering construction costs and reducing currency risk.
Compared to the region, where the Kenyan shilling weakened sharply, and both the Rwandan franc and Tanzanian shilling softened, Uganda’s outperformance stands out.
“A stable currency lets developers plan more confidently,” Lutalo emphasizes. “You can price realistically. You can structure financing without fear of sudden devaluation.”
This aligns with the Mundell–Fleming model: exchange-rate stability attracts foreign capital by reducing uncertainty about return values.
In open, developing economies like Uganda, a stable shilling lowers the risk of sudden currency losses, and therefore, lowers the return investors demand as compensation.
The more predictable the currency, the cheaper it becomes for the country to attract investment, and the easier it becomes to finance long-term projects like real estate.
Financial inclusion as a structural market shift
Uganda’s financial inclusion story is, in many ways, the quiet engine beneath its future property market—accelerating demand, liquidity, and confidence in ways that often escape headline analysis, according to the Broll Uganda Property Market Report released last month.
Traditional banking channels remain narrow, with only 35% of Ugandans holding bank accounts, many through SACCOs and other group-based structures.
But this no longer signals exclusion in the old sense. Instead, it reflects how Fintech has become the country’s dominant financial architecture.
Since mobile money was introduced in 2009, its growth has been exponential.
Uganda now has over 31 million active mobile money accounts held by 23 million uniquely registered users, more than 90% of the adult population, according to Finance Ministry data.
What began as a tool for sending and receiving funds has evolved into a national financial system. Ugandans now use mobile money to pay school fees, settle utility bills, shop, save, and increasingly borrow.
The scale of the ecosystem shows the depth of this shift. In 2024 alone, MTN Mobile Money Uganda issued UGX 1.15 trillion in credit, processed 4.3 billion transactions, and moved over UGX 120 trillion in value, an alternative financial universe running parallel to formal banking: faster, cheaper, more pervasive, and deeply embedded in everyday life.
“As access to financial services expands, household balance sheets stabilise, income cycles smooth out, and the velocity of money increases. For real estate, these effects are profound,” Broll Uganda explains.
When more households can save, borrow small amounts, manage cash flows, and make digital payments, the market for formal rentals expands.
Developers can adopt structured rent-collection systems. Landlords can screen tenants using transaction histories.
And new financial products, micro-mortgages, automated security deposits, rent-to-own models, become feasible.
The National Payment Systems Act of 2020 added regulatory backbone to this growth by bringing mobile money firms under Bank of Uganda oversight, reinforcing trust.
IMF research (2023) found that 91% of mobile money users had never experienced any loss of funds, an extraordinary statistic for a developing economy, and one that helps explain the platform’s dominance.
This trust is now feeding the next wave of PropTech solutions. Digital rent payments, algorithmic tenant screening, micro-credit for deposits, and online property-management platforms all ride on mobile money rails.
As the Broll report notes, growth in financial inclusion has largely been Fintech-driven, with much of the informal sector turning to mobile money as a cheaper, more accessible alternative.
In short, Uganda’s financial inclusion revolution is doing more than expanding access; it is rewriting the infrastructure through which property will be financed, managed, and transacted in the decade ahead.
Capital markets: An institutional backbone taking shape
Uganda’s capital markets, long seen as narrow and fragile, are deepening in ways that matter profoundly for real estate.
Over the last three years, the Uganda Securities Exchange has been volatile, as expected in a young market.
But beneath the swings is a clear upward trend. By March 2025, market capitalisation had risen to UGX 28 trillion from UGX 23 trillion a year earlier, reflecting broader participation from individuals and corporates and strengthening confidence in the market’s architecture.
The most significant development is not equities, but Collective Investment Schemes (CIS), unit trusts that pool capital from thousands of small and institutional investors.
These schemes grew from UGX 500 billion in 2021 to UGX 4.2 trillion in 2025, an increase of more than 700%, according to the Capital Markets Authority.
In a country historically starved of long-term savings, this represents the emergence of a genuine institutional investor base capable of funding long-dated, large-scale projects, shopping centres, industrial parks, office towers, and REITs that define modern property markets.
In property economics, institutional capital is foundational. It enables pension funds to back REITs, infrastructure funds to finance logistics corridors, and developers to execute multi-phase master-planned precincts without relying solely on expensive bank debt. Uganda is finally laying that foundation.
But capital markets must also be understood through the government bond market, the benchmark that prices credit across the economy.
Tribunal Backs URA in UGX 10.2 Billion Century Bottling Tax FightOver the past four years, Uganda has maintained a generally positive yield curve, though volatility appeared between 2022 and 2024.
In 2025, heavy domestic borrowing pushed long-term bond yields to around 18%, the highest level in a decade.
Because bonds anchor loan and mortgage pricing, this made borrowing expensive. Lending rates rose sharply to 17–19%, roughly 800–1000 basis points above the Central Bank Rate, which has held at 9.75% since October 2024.
Macroeconomic theory would predict that credit demand would cool at such rates. Yet Bank of Uganda data shows continued borrowing: personal and household loans account for 25% of bank lending, while mortgages, construction, and general real estate make up another 20%.
The remaining 55% is spread across trade, manufacturing, and agriculture. Even in an expensive credit environment, Ugandans continue to borrow for homes and property-linked activity, partly because demand in rapidly urbanising economies is relatively inelastic.
This coexistence of rising institutional capital, expanding unit trusts, high bond yields, and persistent borrowing highlights a market at an inflection point.
Borrowing remains costly, but Uganda is building long-term capital pools that will gradually shift real estate finance away from short-term debt toward more stable institutional sources.
Demographics: A young nation moving into cities
Uganda remains one of the youngest nations in the world, one of the most consequential facts for its real estate trajectory.
The 2024 Census counted 45.9 million people, growing at 2.9% annually over the last decade.
But the story is not only about population growth; it is about where that population is moving and how it participates in the economy.
Half of Ugandans are under 18, and only 5% are above 60. The working-age population, about 20 million, is rapidly urbanising, with more than 65% of working adults now living in urban areas.
This places them at the centre of formal housing demand, retail consumption, logistics needs, and commercial services.
Urbanisation is not merely a movement; it is a shift in productivity. Cities concentrate labour, infrastructure, talent, education, and capital, the mix that multiplies economic output and supports deeper real estate markets.
As more Ugandans move into cities, demand becomes more predictable and structurally grounded.
Kampala and Wakiso remain demographic anchors with 1.8 million and 3.4 million residents, respectively, but density is spreading outward.
Emerging clusters are growing across eastern, central, and western regions, while Yumbe in the north, boosted by refugee settlements, has become one of the country’s fastest-expanding areas.
Alongside this momentum is a structural constraint: income distribution. As of 2021, about 10 million Ugandans were employed for pay or profit, but 61% were in agriculture, forestry, or fishing—low-income, low-productivity segments.
The private sector employs only 2.3 million, and the public sector 400,000.
This is the central tension shaping Uganda’s property market: a young, urbanising population with rising spatial demand, but incomes still anchored in low-productivity sectors.
,The result is a dual reality—intense pressure on urban housing, retail, and logistics, paired with limited affordability just as demand expands.
For investors, the opportunity lies in understanding how demographic pressure interacts with income distribution to determine what kind of real estate can succeed.
A market decentralising beyond Kampala
Uganda’s property market, long concentrated in Kampala, is decentralising at a pace not seen before.
The creation of 10 new cities has altered the geography of opportunity. As the Broll report notes, these cities are poised to drive decentralised real estate development.
Industrial parks are the true catalysts of this shift. Eight are operational and 25 more planned.
Industrial activity is clustering in logical patterns: textiles in Lira and Nakasongola; cement and steel in Tororo; automotive assembly in Jinja; timber in Mbarara and Fort Portal; metals in Kasese; and refinery-led activity in Hoima.
These clusters are not isolated factories, they are nuclei of new economic zones generating demand for housing, retail, logistics, and hospitality.
Lutalo argues decentralisation exposes a major supply gap: “People are looking for projects. We just don’t have well-packaged projects. The assets that truly fit the investment-grade definition are very few.” Demand is shifting faster than supply quality.
Residential demand is rising across emerging cities, while homeownership is slipping.
The Broll report notes that in 2024, about 65% of households owned their homes, down from 73% in 2014.
Demand is stratified. Lower-income households rely on tenements—compact rooms with shared sanitation, while the middle class gravitates toward semi-detached houses, row homes, and low-rise apartments.
Yet in many new cities, population growth is outpacing planning. Infrastructure and serviced land lag behind, creating opportunities for developers who can deliver structured, managed rental stock.
Commercial real estate outside Kampala remains thin. As Broll observes, there is a conspicuous lack of single-use office buildings; most office activity is wedged into mixed-use spaces or converted residences.
Retail is equally fragmented, with only Mbarara and Mbale showing early pricing power.
The deeper challenge is structural: very little investment-grade commercial stock exists.
“Real capital only follows investment-grade properties … the problem is our developers want to cut corners,” Lutalo says. Demand is not the constraint—product quality is.
Hospitality: A split market with high ceilings
Uganda’s hospitality sector operates on a two-speed model. At the top end are super-luxury eco-lodges in Bwindi and Kidepo, where a night can cost up to $1,600, targeting high-net-worth adventure tourists drawn to what Broll calls some of the wildest destinations in the country.
At the bottom end are $10 guesthouses and motels serving domestic travellers and low-budget visitors.
Between them sits a broad band of urban hotels priced $50–$200 per night, supported by corporate travel, NGOs, and regional business.
Parallel to these formats, the sharing economy is reshaping supply. Platforms like Airbnb, Booking.com, Agoda, and Kayak have popularised home-stay and short-let models, expanding quickly in tourism-heavy zones and emerging cities.
Homeowners can now monetise spare rooms and apartments with increasing ease.
Together, these layers produce a hospitality market with deep affordability at the base and exceptionally high ceilings at the top, one of Uganda’s most globally linked real estate plays.
Where the opportunities converge
Uganda’s macroeconomic shifts, demographic momentum, and industrial decentralisation do not contradict each other.
They form a coherent picture: demand is broadening across the country, but the supply of truly investable real estate remains thin. That imbalance is the source of opportunity.
As industrial parks multiply and new cities take shape, fresh economic centres emerge with their own gravitational pull.
Manufacturing clusters in Tororo, Jinja, Lira, Hoima, Kasese, Fort Portal, and others will require worker housing, logistics facilities, neighbourhood retail, and hospitality infrastructure.
Urbanisation adds another demand layer: as people move from subsistence livelihoods into urban labour markets, rental housing becomes a necessity, especially in new cities that lack organised supply.
This creates long-tail demand for well-managed, durable rental stock.
The commercial gap amplifies the opportunity. Across the country, the absence of single-use office buildings and modern retail centres contrasts with a clear appetite for investment-grade assets.
In hospitality, global tourism demand continues to support high-end lodges, while short-let platforms expand the mid-market.
Taken together, these patterns show why the macro matters. As GDP growth strengthens, inflation stays within target, the shilling stabilises, mobile money deepens financial access, and capital markets expand, the platform for real estate investment becomes more predictable.
The opportunities emerging today are possible because of these macro foundations, not despite Uganda’s constraints.
