Impact of distressed properties on the real estate market in Uganda. Case study: Wakiso District
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The study aimed at assessing the impact of distressed properties on the real estate market in Uganda. The study focused on three specific which included; determining the sources real estate financing and real estate market participants in Uganda, causes of distressed properties and finally determining the extent to which distressed properties affect the neighborhood properties and possible remedies. In order to obtain primary data, the study employed open and closed ended questionnaires. A sample size of 80 professionals from different disciplines, comprised of property developers and auctioneers, valuation surveyors and Bankers were involved in this study. The selection was based on purposive sampling method to obtain reliable data. The findings of the study indicated that the inflation was a major cause of distressed properties in Uganda. Other causes included, speculation, high interest rates, diversion of funds by the borrowers and poor credit appraisal. The findings also show that distressed properties negatively affect the neighborhood property values as well as the real estate market at large. The findings further explain that distressed properties can be used to align the real estate market in cases where market participants want abnormal profits. A number of measures to effectively overcome distressed properties were portrayed. These include; government intervention, feasibility studies and thorough review of the underwriting process. Conclusions drawn from the study revealed that Wakiso district has experienced a number of distressed properties in different parts of the district. Therefore, thorough attention should be encouraged among different stake holders to overcome the foreclosure problem, that is not going away. However, the conclusions and recommendations of the study were based only on Wakiso District, further research should be carried out in other parts of Uganda to make an informed deduction from all the parts of the country.