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Real estate up for major boost with proposed law
What you need to know:
- Explaining the challenges, she said that the real estate business is not regulated, and therefore some of its products are substandard.
- The law will regulate, coordinate, and promote the real estate sector.
Dar es Salaam. The Ministry of Lands, Housing and Human Settlements Development is currently in the process of enacting a law to govern real estate business in the country.
The law will regulate, coordinate, and promote the real estate sector.
The Real Estate Acting Director in the ministry, Upendo Matotola, told The Citizen that the real estate market in the country is growing fast. According to her, the growth is due to the favorable and enabling environment created by the government.
“This growth demonstrates that our business and economy are improving, including attracting domestic and foreign investors.
The significant investment is expected to increase from foreign investors (FDI, or foreign direct investment),” she said.
Given this, she said the government was currently reviewing the national land policy of 1995 to capture real estate.
“We are currently in the final stages of approval before starting the process of enacting the new law,” she said.
According to her, they have started the initial process of making the law, including research to determine whether it was necessary to come up with the law as well as understanding what particular aspect needs to be regulated.
Explaining, she said, the research was vital because it would also enable the government to understand whether the cost-benefit analysis overrides the costs the government will incur.
Explaining the challenges, she said that the real estate business is not regulated, and therefore some of its products are substandard.
“Real estate is about information, to enable investors to make informed decisions and not do investments blindly,” she said.
She notes that data will make investors do research before making decisions and also determine the market without pricing or overpricing.
Further, she explained that the real estate contribution to the economy is still not clear because there is no correct information, but notes that after the Act comes into force, the challenge will be solved.
In another development, she said that the government issued a Notice on the Assignment of Ministerial Functions (Instruments) through Government Notice No 385 of May 7, 2021, which was subsequently amended by GN No 534 of July 2, 2021.
This notice establishes the Ministry of Lands, Housing and Human Settlements Development, which is responsible for formulating and overseeing the implementation of policies related to real estate.
In July 2022, the real estate unit was established within the ministry.
Its primary objective is to regulate, coordinate, and promote the real estate sector, ensuring a stable and transparent real estate market, protecting the interests of industry players, and enhancing government revenue.
To improve the performance of the real estate market in the country, among other functions, the Ministry has been organising the Real Estate Stakeholders’ Meetings, which bring together the stakeholders to discuss pertinent issues regarding the sector.
“We are working on having digital platforms provide transparent and equal access to real estate information,” she said.
When contacted, developers in the industry expressed hope and optimism that the future held boundless opportunities for progress and prosperity.
Watumishi Housing Company CEO Fred Msemwa said the law was long overdue.
“For development to happen in the sector, there should be regulations to oversee what is happening in the sector,” he said.
However, he was quick to point out that the Act should not come up with a regulatory authority but rather a real estate development authority.
“The problem with regulatory authority personnel is that they tend to think they are there to control businesses rather than facilitate them,” he said.
On his part, the Director General of the state-run National Housing Corporation (NHC), Hamad Abdallah, said the contribution of real estate cannot be quantified because it lacks a body to oversee it.
“There is an urgent need for a body that will coordinate the affairs of real estate so that when a developer plans to build and sell, he is given terms and conditions that he must adhere to,” he said.
Further stressing that the decision to enact the law should be sped up so that sector activities are put in a safe place.
