Assessing the need for the creation of a comprehensive property index in Uganda.

Abstract

In order to create a timely and accurate indicator of residential house price trends, the Uganda Bureau of Statistics in partnership with Bank of Uganda embarked on the compilation of the Residential Property Price Index (RPPI) for Greater Kampala Metropolitan Area (GKMA), this includes areas of Kampala, Makindye, Wakiso, Nakawa, Kawempe and Rubaga. A property index is a statistical measurement designed to demonstrate how the value of a property variable or group of variables change with respect to others such as time and geographical area. The RPPI is a comprehensive measure of the movement of residential property prices in the economy at a given time. This index has played a vital role in the economy as housing is a major source of individual wealth in the GKMA however, there are many other property indices that need to be created country wide so as to aid policy makers, market analysts and researchers among others in drawing a range of important economic and social decisions. The nation requires property indices capturing real estate prices by region, by major cities, in industrial property, commercial property, commercial rent, land values among others that are currently absent, so as to make more definite decisions in the economy. This research was aimed at assessing the need for the creation of a more comprehensive property index in Uganda. It looked at the creation of property indices in other countries, the methods they used, the challenges they faced and the benefits they accrued from creation of these indices and their applicability to Uganda. It was realized that the creation of a comprehensive property index brought transparency and standardization into the user’s property market, performance measurement was easily done with other asset classes, investment decision was taken with accuracy and it also provided an important benchmark against which performance of the managers of different property portfolio was measured i.e.in South Africa and Morocco. A total of 60 questionnaires were administered to property market participants such as property financing institutions, statisticians, property managers and property valuers in Kampala and a total of 46 questionnaires were retrieved back. Analysis of the data was done with the use of bar graphs. The findings from the data analyzed revealed that there is need for the creation of a comprehensive property index in Uganda as all the participants agreed to benefits that accrue from the existence of one.