However, amidst its prosperity, there exists a unique economic situation for many residents, the soaring costs of housing. As the demand for accommodation rises, the dream of owning a home in Kampala is becoming an increasingly expensive pursuit.

The real estate landscape in Kampala has experienced a notable price surge, making homeownership a formidable task for locals.

This was highlighted by Numbeo’s price-to-income ratio, which shows Kampala as the most expensive city. The price-to-income ratio is a technique that displays the ratio between the current market value of the housing unit that a household intends to acquire and the total yearly income of the household.

Numbeo’s formula for arriving at this index is as follows, ratio of median apartment prices to median familial disposable income, expressed as years of income. Net disposable family income is 1.5 * the average net salary (50% is the assumed percentage of women in the workforce). The median apartment size is 90 square meters, and the price per square meter is the average price per square meter in the city center and outside of the city center.

Based on this formula, Kampala, as presently constructed has the highest price-to-income ratio in the world by a huge margin. Kampala’s current price-to-income ratio is 79.4, with Shanghai, China following at 49.3, and Douala, Cameroon in 3rd place at 47.1.

No other African region has a price-to-income ratio higher than 40, aside from Kampala, Douala, and Addis Ababa, which has an index of 40.2. Other top African cities have indexes ranging from 25.9 to 1.8.

Despite Numbeo’s assessment, Uganda’s economy has been performing very well, going from an inflation rate of 10.4 in January to 2.4 in October, with each main component of the Consumer Price Index experiencing a drop.

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Business Insider