The pragmatic choice: prioritizing buying a home over building a new one in Dar es Salaam.

Dar es Salaam, a rapidly expanding economic hub is facing a critical housing demand driven by its rapid growing population which is estimated to be more that seven million people. To address this surge, strategic housing solutions are needed. While there is strong tendency for  many people to build their dream houses, the complexities of urban construction in Dar es Salaam often render the  buying house a more efficient and pragmatic strategy for meeting the housing needs.

The construction of a new residence in Dar es Salaam often has its own complexities. Land acquisition, particularly for those with constrained budgets will buy land plots in the periphery and unsurveyed areas. There are many incidences of land buyers getting exposed to risks of fraudulent transactions. Furthermore, cash flows limits  the hiring of registered contractors, forcing the individuals to assume direct management of building process. This approach exposes them to other risks such as fluctuating prices of building material and other unforeseen construction challenges. It makes the whole experience of building dream house an emotionally taxing experience. The process of building can also take long time forcing the individual to find alternative house during the waiting time. There are also delays due to material shortages, and labor issues. There are also many permits that must be obtained before construction can begin. These permits can be bureaucratic and time consuming to acquire. Also, when building a house, you have to consider the infrastructure of the area, will the power and water supply be reliable? Will the roads be maintained? These are all factors that need to be considered when building a home.

On the other hand, purchasing an existing house offers compelling benefits that include the following;

Immediate Occupancy:

One of the most significant advantages of buying the house is the ability to move in immediately. This eliminates the need for temporary housing and the uncertainties related to building timelines.

Established Neighborhoods and Amenities:

Existing homes are typically located in established neighborhoods, providing access to essential services such as schools, parks, and healthcare facilities. Careful selection allows buyers to choose a location that aligns with their lifestyle and family needs. Additionally, established neighborhoods often possess a sense of community and social cohesion that can be lacking in newly developed areas.

Access to Financing:

The availability of mortgage financing gives the buyers to leverage long-term loans and easy access to homeownership. A number of banks in the country are offering mortgage services. It is easy to use the existing structure or the house as a collateral for the mortgage rather than a future construction project. It is also offering reducing the financial burden to the buyer of the house as the loan will be repaid in future.

Choice of Location:

While building your own house affords location flexibility, often times these locations are remote and unsurveyed areas. In contrast, the buying option gives the buyer an opportunity to buy property (a unit title/apartment) from property developers in the  prime locations such as Masaki, Upanga, Ilala, Mikocheni, and other prime areas. The buyer is assured of buying a house in an area close to workplaces and vital services. This proximity translates to reduced commute times, increased convenience, and enhanced quality of life.

Established Communities and neighborhood:

Purchasing within an established community fosters social integration and provides a clear understanding of the neighborhood's dynamics. This allows for a better understanding of the neighborhood, and the ability to choose a location that fits your social needs. You can get a feel for the safety of the area, and the general atmosphere of the community.

Ownership flexibility

An individual who builds a house from scratch develops a strong emotional attachment to the property. This attachment can significantly limit ownership flexibility and transferability, as owners may resist selling, even during favorable market conditions, due to sentimental reasons. In contrast, buying a house often signifies a forward-looking perspective and future plans, with the buyer treating the property as an investment. Consequently, if an opportunity arises to make more money by selling, the buyer is likely to be more flexible, as awareness of market values and potential returns can supersede emotional decisions.

In conclusion, given Dar es Salaam's escalating housing requirements, acquiring an existing home is most prudent alternative to building. The convenience of immediate occupancy, access to established infrastructure, and streamlined financing options render it a practical and efficient solution for middle-class residents. Diligent research and careful consideration of individual needs will enable buyers to secure their ideal residence within this dynamic urban environment.

Author:

Francis Kiwanga

CEO - Ruaha Assets Ltd.