The economy behind Uganda's property market: 6.3% growth, 3.1% inflation, a steady shilling

Property prices are usually explained street by street: this suburb is hot, that road is finished, this land has a clean title. All true, and all sitting on top of something bigger. Knight Frank Uganda's H2 2025 review opens with the economy, and it is worth reading in that order.

Growth is back where it was before the pandemic

The report's GDP series tells a clean story. Growth ran at 6.3% in 2018/19, fell to 3% and 3.5% through the pandemic years, then climbed steadily back: 4.6%, 5.2%, 6.1% and 6.3% in 2024/25. Uganda has spent five years recovering the ground it lost, and has now recovered it.

Prices are calm, borrowing is not

Headline inflation fell from 3.8% in July to 3.1% in December, and core inflation from 4.2% to 3.1% — its lowest in nearly two years and comfortably below the Bank of Uganda's 5% medium-term target. The Bank held the Central Bank Rate at 9.75% throughout. Calm prices, though, did not make loans cheap: commercial banks' shilling lending rates still averaged 19.07%. That disconnect is the reason a stable economy can sit alongside a property market where most purchases never involve a bank.

A stronger shilling and a record surplus

The shilling appreciated 2.4% over the year to December 2025, and Uganda recorded a balance of payments surplus of US$2.37 billion. For anyone holding a dollar-denominated loan or paying dollar rent — common in prime Kampala and across commercial property — a stronger shilling quietly reduced the bill. It can just as quietly increase it again.

Real estate as an industry

Real estate output rose from UGX 3,323 billion in Q3 2025 to UGX 3,343 billion in Q4 2025, about 0.6% quarter-on-quarter growth, following UGX 3,117 billion and UGX 3,187 billion earlier in the year. Steady rather than spectacular, and driven by urbanisation, infrastructure investment and continued development activity.

A growing economy with expensive credit produces exactly the market Uganda has: plenty of building, very little borrowing.

What to watch next

• Commercial oil production targeted for the second half of 2026, and the industrial and logistics demand running ahead of it.
• Infrastructure delivery — Kabaale international airport, the pipeline, the standard gauge railway, Nakivubo and Kampala's road works — which changes which areas are convenient.
• Coffee exports, which reached US$2.4 billion and are pulling warehouse demand with them.
• Whether lending rates ever follow the policy rate down. Nothing widens home ownership faster than credit that ordinary earners can service.

General information only, not financial advice. The full review is published by Knight Frank Uganda at knightfrank.ug.