Booming real estate, nightmare for low income earners

This is music to real estate agents and to the construction sector stakeholders in general.

Dar es Salaam takes the lead in this demand and with a population close to 5 million, this commercial port city is Africa’s fastest growing city. Now, while investors dance to the tune of ever fattening bank accounts, Dar es Salaam’s real estate sector boom is a nightmare for low income earners.

Consider a report by Global Property Guide that holds, housing price per square meter in Dar Es Salaam averages USD 1,200 now compare that to East Africa’s largest economy Kenya where in Nairobi, the average housing price per square meter is slightly higher at USD 1,235. However when it comes to renting, say a one-bedroom apartment in Dar es Salaam’s city center, one would part with an average of USD 775.3 a month versus USD 444.5 a month in Nairobi.
So it costs more than USD300 more to rent an apartment in Dar es Salaam’s city center than it does in Nairobi’s City center.

Given those rates, it is obvious that only expatriates and top management can live in Dar’s city center while the majority continues to squatter on the outskirts of the city. These folks survive on a little over a dollar a day and can hardly afford three regular meals let alone partake of the city’s luxuries like a lavish apartment in downtown Dar es Salaam.

Charged with housing the nation, the National Housing Corporation that is enjoying this real estate boom recently announced its special consideration for low income earners. It said it is starting to construct housing for low income earners that will cost a price ranging between Sh20 million and Sh25 million.

These figures leave a lot to be desired, or rather what is NHC’s definition of Tanzania’s low income earners because at those rates, a person who chooses to dedicate their entire monthly salary to paying for the house would have to earn on average 2 million per month.

Granted house payments are done on mortgage terms but even so, that covers a small working percentage that is employed or has some other form income security. To the average Tanzanian, owning a houses is but a wishful thought never to be realised.

With the government talking of regulating the informal housing sector in which most of the nation is housed, there just maybe light at the end of the tunnel. However until then, in this concrete jungle, landlords are the lions and they eat the lion’s share.

At the moment, a landlord/lady can and do charge annual rental fees further throwing the low income earners deeper into poverty. You see, though one maybe able to comfortably afford a small one bedroom house complete with a kitchen and bathroom at around 150 000/- say in a Kinondoni suburb like Mikocheni, however when that figure is multiplied by 12, the same person is forced to move to a slum area where they will have to settle for a single room, no kitchen and a shared latrine with some 12 other tenants for an average of 70 000/- also payable per year.