Land cost soars in secondary cities

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Land cost soars in secondary cities
Land cost soars in secondary cities

Africa-PressRwanda. An index to be gazetted soon has revealed that the cost of land has drastically risen over the past two years, mainly in secondary and satellite cities.

Alexis Gatoni Sebarenzi, a researcher who was part of a team that compiled a countrywide study on the value of land said the price of land increased by 19 per cent in the City of Kigali.

Commissioned by Rwanda Land Management and Use Authority (RLMUA), the study further revealed that in secondary and satellite cities the cost of land had risen faster than in the City of Kigali.

According to land reference prices published in November 2018, Rwf169,676 per square metre was the maximum reference price or the highest price for land parcels in Kimironko.

Gisozi came second at Rwf152,550 per square meter, followed by Nyarugenge at Rwf151,697 and Rusororo at Rwf151,169. However, based on the new reference prices, the value of land in these areas has since risen by 19 per cent.

The expropriation law provides that the prices of land be reviewed every year. However, due to the outbreak of the Covid-19 pandemic and the changes to the valuation method, the review was suspended in 2019 and 2020.

The new land valuation method uses has adopted Artificial Intelligence methods such as machine learning and geospatial technologies such as Geographic Information Systems (GIS), Sebarenzi said. While land remains more expensive in Kigali, secondary cities have registered the highest gains, he disclosed.

“The increase is due to the rapid growth of urbanisation…the secondary cities have started to attract more investments and infrastructures projects, which have conspired to drive up the cost of land,” he explained.

Secondary cities include Rubavu, Rusizi, Huye, Nyagatare, Karongi and Musanze. The latest preliminary costs of land, which The New Times has seen, indicates that the price of one square metre goes for Rwf196 in urban areas such as Rwenje cell in Rusizi District.

One square metre currently goes for Rwf16,334 in urban areas like Nyamyumba sector of Rubavu District. In Kigali, for instance, a square metre in Kiyovu cell in Nyarugenge District goes for Rwf233,587.

In some rural areas Musanze District, a square metre currently costs Rwf15,382. In the rural part of Ngoma District it costs Rwf1,554 and just Rwf56 in some parts of Kayonza District.

Implications of rising prices

The researcher explained that the rising cost of land has varying implications, particularly slowing down the efforts to construct affordable decent houses.

“They offer guidance on the market. They can guide land valuers, buyers and sellers. However, the market power and bargaining can influence and change the price despite the price reference,” he said.

He, however, explained that the prices are a bit binding/obligatory during the expropriation exercise because sellers are not the ones who chose to sell. Alexandre Nzirorera, a real estate dealer, said that soaring land prices will affect those who earn less than the market demand.

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