Access to Finance Rwanda funded the study to support their goal of incorporating affordable housing into their overall approach toward developing Rwanda’s financial sector to meet the needs of lower income households. The objective of the study was to scope and document the breadth of housing sector activity in Rwanda, including the demand and supply-side, as well as to identify value chain constraints to the financing and performance of Rwanda’s affordable housing market.
71point4 partnered with the Centre for Affordable Housing Finance in Africa (CAHF) and in-country consultants, Fatou Dieye and Baba Ali Mwango, to provide a detailed overview of the affordable housing sector in Rwanda including a demand-side analysis, supply side analysis and a review of the enabling environment.
71point4 lead the demand side analysis which involved scoping and understanding the needs and capacities of Rwandans. Existing household surveys including FinScope 2020 and the Integrated Living Conditions Survey 2016/17 were used to analyse housing conditions and determine affordability. An access frontier methodology was also carried out to quantify key access barriers to the uptake of existing housing finance products. The team also scraped a number of online classified websites to access data on rental and sales prices.
The supply side analysis scoped out the diversity of the housing supply sector together with its financing and key players. Different housing submarkets were identified and value chain blockages were analysed for each submarket. Demand side scenarios were also considered by using survey data to map the relevant customer segments to each housing submarket.
The team also conducted a review of the data landscape, this involved identifying available data that could support investment decision-making for affordable housing and making recommendations around how this data could be better disseminated as well as encouraging the provision of additional data.
Rwanda has a developing housing and housing finance sector, but several constraints are present. While the demand for improved housing conditions is high, upgrading of existing settlements is difficult due to the lack of foundational infrastructure, challenging geographical landscape and strict building codes in certain areas in need of densification. In addition, typical housing finance products are not accessible to the majority of the population due limited affordability. And while the country has a critical residential rental sector, it is not well supported by policy and finance.