The effect of housing price on housing affordability in Kampala,Uganda

Residential property market in Kampala has experienced significant growth over the past years with house prices rising exponentially. As economic theory has explained, house price movements is inherent with the regional economics and regional demographics such as income, cost of capital, population change…However increasing house prices could lead to lack of shelter to the individuals renting to some extent. Under any circumstance, the need for housing as a basic necessity persists. The research was intended to analyze house price with regard to affordability in the residential rental housing of Kampala. Single family units as opposed to condominiums were examined. The study draws from the 30/40 rule of housing affordability and the hedonic regression approach of house prices and examine whether the income of individuals in Kampala spent on rent has an effect on the affordability. A sample of 384 respondents was interviewed using closed ended questionnaires in the five division of Kampala and exploratory, cross sectional and quantitative research designs were adopted in this study. The data was collected through five point scale questionnaire, coded using Epi data and analyzed using SPSS. Regression and correlation tests were also run to establish the relationship and impact of independent variable on the dependant variable.