It is everyone’s dream to own a place to call home but that is becoming hard as middle income earners struggle to build houses or find alternative affordable housing as land prices continue to rise sharply, thanks to speculation in the land market.

Average Rwandans could soon not afford land in Kigali and its outskirts as land owners cling to their land with the hope that it will appreciate while those willing to sell are raising prices.

A mini-survey by Rwanda Today shows that several businessmen and bank employees, who have access to liquid cash, are buying and hoarding land with the hope of selling it at a higher price later.

For example, a plot of land in the suburbs of Kimironko, Kinyinya, Gisozi, Kanombe, Gahanga and Ruyenzi would on average go for Rwf1.5 million two years ago but today, it cannot go below Rwf4 million in the same areas.

This rise is attributed to the city spreading so fast, making these areas, which were considered far off two years ago, appear nearer prime.

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Land dealers and brokers who spoke to Rwanda Today said that a number of Rwandan businessmen are diverting resources into acquiring land and selling it later at a high profit.

“It is what I do instead of keeping my money in the bank. I deploy about 10 ‘commissioners’ who find me land to buy cheaply. I own it for six months or a year and sell it at a higher profit,” said Sarah Ikirezi Rugema, a businesswoman who deals in furniture and beauty products.

“When I sell off the land, I have enough capital to invest back in my business and I also make a lot of profit off the land. So it is good business,” says Rugema.

Gentil Hakolimana, a local land dealer, also told Rwanda Today that land business is booming with many Rwandans with disposable income rushing to acquire land, regardless of whether they have plans to develop it.

“There is a general fear that land prices could go even higher in the next couple of years. So what people do is buy and keep it just in case. Every day I receive more than 10 calls of willing buyers.

“However, you also have those willing to sell hanging on their land with the hope that it will appreciate if they persist for a few months or if they are to give it away, they do so at a higher price,” said Hakolimana.

According to Dr Emmanuel Nkurunziza, the Director General of the Rwanda National Resources Authority (RNRA), there is little the government can do to regulate the land market as it operates on the principle of demand and supply.

“It would be a bit tricky for a government to intervene and regulate the land market. We leave it to demand and supply forces. Rwanda is a liberal market economy, so is the land market. The government can only come in if there are distortions that can affect the economy.”

To its credit, the government has build information sources on land and provides land titles to ensure that any land transaction is done openly and genuinely.

“For example you cannot buy land without a land title. That is the only regulation in place,” he said.

On land hoarding, he said the government only intervenes when people possess land which is undeveloped for three consecutive years. This is done at sector level.

“The sector can warn you and if you do nothing about it, it can even be repossessed. This way, people will be forced to do something-either develop it or sell it to someone to develop it,” Dr Nkurunziza said.

He said that the government is moving to increase tax on undeveloped land as a way of reducing the land hoarding practice.

READ: Rwanda warns on idle plots at economic zone

The so-called commissioners like Hakolimana, use infrastructure and Kigali Masterplan bait to lure prospective buyers.

“Of course, when you are selling land or a house, it is important for the buyer to know where they will fall under the masterplan and whether a tarmac road will pass close by in future.

“For example, in the past two years, you would get a plot of land in Kinyinya at Rwf1.5 million but ever since the government improved access to electricity and announced two major road projects, the value of these plots has gone up to Rwf5 million and more,” Mr Hakolimana said.

Infrastructure is key in determining the value of land. Others are speculation and anxiety among long time city residents who fear city authorities could soon expropriate their land to pave way for developers.

“Some are anticipating that they will soon be asked to develop their land or move if they don’t have capacity. So what they do is to sell and go far but in doing so they want to make the most of it,” says Hakolimana.

One of the areas Rwanda Today visited, citizens intimated that as soon as a bigger project emerges, the surrounding residents panic and sell off their land.

For example in Kagugu, when construction of the One Dollar Complex started, residents in a nearby slum feared that they could soon be expropriated and started courting buyers who would be willing to put up structures that could be in the same league as the complex.

READ: Slums to skyscrapers: Where do the expropriated people go?

“We thought our small and old houses would be demolished,” says Sarafina Uwantege, who is willing to sell off her piece of land nearby — on which stand two rickety tin-roofed houses — at a minimum of Rwf12 million.

Asked how she came up with the price for her land, her only answer was that the area was developing fast into an affluent suburb, even though she knows the two small houses add no value to the land.

She said she never bought the land, as it is her ancestral land.

“This used to be a village, now you can see it is becoming a city,” she said.

On the left, her neighbours have already sold and the new owner has fenced her off, living her stuck in between. Even then, she is not letting go, with the hope that a willing buyer will surface.

On the other hand, historical land owners in the now mushrooming commercial centres like Kisementi, Kimironko, Kiyovu, Kimihurura and Remera are pocketing even larger sums of money as multi-million developments crop up in these areas.

According to Gaspard Murangwa, a land owner and resident of Kisementi, one of Kigali’s fastest growing commercial hubs, a plot of land here cannot go for less than Rwf100 million.

What was once family land with old residential houses is now very lucrative, with the family turning down prospective buyers willing to pay as much as Rwf90 million.

“We want Rwf200 million because, we think this is very strategic land,” said Murangwa, noting that a similar plot of land, where Dr Agarwal’s Eye Hospital is standing now, was bought for Rwf120 million more than three years ago.

He also claims that the land on which Croix du Sud Hospital stands was bought for more than Rwf100 million more than five years ago.

As it is, most Rwandans and investors are targeting the City of Kigali, which means that the demand of land in Kigali is more than 10 times higher than it is in provincial cities like Rwamagana, Muhanga and Musanze.

The City of Kigali projects that going by the current pace the ambitious Kigali City Masterplan could fully be implemented in 50 years’ time. City residents are now looking to Bugesera or other far off parts of the city such as Rusororo, Bumbogo as well as Kamonyi district.

For now, the dynamics in the land market have had no adverse effect on the economy but Eudes Kayumba, the chairman of the board of Rwandan engineers and architects says that it would only be dangerous if people hoard important land to sell it to investors later at inflated prices.

Director of Urban Planning at KCC Lilian Mupende believes people are free to determine prices of their plots but warned buyers against buying land without first considering the Kigali City Masterplan.

“Before you buy, know what that area is designated for and know if it will be possible to acquire a construction permit,” she said.