In 2018, at the invitation of the Uganda’s Ministry of Finance I did find myself in Munyonyo Speak Resort at a High Growth Conference. This was no ordinary meeting. Uganda economic brains were on dispaly and all multi-sectoral players and developmemt partners sent their top honchos. You could look in the audience and spot many that have a say in how Uganda’s economy is run.
Soon it was the turn for the IMF Country Director to prescribe how Uganda could achieve faster and inclusive growth. First she had some observation to make that blew me away. The IMF had conducted a indepth research on where Ugandans invest if they has some disposable income. The research found out that 70% of all available resources end up in brick and mortar investments as homes and commercial buildings. This is way higher than the global average of 40%.
In Business we say the market cannot be wrong and if you try to prove the market wrong, it will only lead you to Bankruptcy.
You see real estate is a store of value and a hedge against inflation and intrusive bankers and regulators. Yes if you have a couple of billions in the bank or in treasury Bonds, strange things might start happening to you . So most people prefer to use real estate to store and sometimes hide their wealth in brick and mortar.
So what does this means for you? First, long as our population is increasing rapidly and as longer as people are creating wealth that need to find a store of value, real estate prices and housing in particular will see phenomenal growth and those that are at the right intersection of this flow will make a killing. Its also a generational asset that many aspire to leave behind for their offsprings.
In most cases its not that you can’t afford to buy land, its that you want to buy it in places you can’t afford. That’s the lesson for the day.
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