Real estate regulation in the pipeline

“There were some provisions in the Land Policy that needed to be updated and this has been done. Preparations are underway to make the revised policy public,” she said.

Ms Matotola added that the ministry will seek the Cabinet’s approval before the revised policy is made public to pave the way for a new law that will govern the real estate industry in the country.

A new law will, in turn, set the stage for the establishment of a regulatory body to oversee the sector.

Earlier in the year, Ms Matotola told The Citizen that the decision to introduce a new law was in response to rapid growth of the domestic real estate industry, which is flourishing as a result of a favourable business environment created by the government.

“This growth is a clear indication that our economy is improving steadily and we are seeing increased investment, particularly by foreign investors,” she said.

The government’s decision to review the 2016 Land Policy is aimed at addressing the complexities of the real estate market, which has seen rapid expansion in recent years, Ms Matotola added.

The review follows research undertaken by the ministry, which also established the need for a sector-specific law and sought to identify key aspects that need to be regulated.

Ms Matotola said some players in the real estate industry are taking advantage of lack of regulation to deceive customers and investors.

“Accurate information is crucial in real estate as it enables investors to make informed decisions and avoid risky investments.”

Ms Matotola added that accurate data and related information will lead to clearer pricing, reduce overpricing and help to accurately gauge the real estate industry’s economic contribution.

The government has in recent years been working to improve real estate oversight through a series of initiatives, including the establishment of the Real Estate Unit within the Land, Housing and Human Settlements Development ministry in July 2022.

The unit is tasked with coordinating and promoting the sector, ensuring market transparency and growing government revenue from the industry.

The ministry has also organised a number of stakeholder meetings to address critical issues within the industry.

“We are working on digital platforms to ensure transparent and easy access to real estate information,” Ms Matotola said.

Industry stakeholders have expressed optimism about the envisaged changes.

Watumishi Housing Investment (WHI) chief executive Fred Msemwa said the introduction of a law governing real estate is long overdue.

“For development to happen in the sector, we need to have regulation,” he said.

However, Mr Msemwa added that the law should establish a real estate development authority instead of a regulatory authority, which will be more of a controller than a facilitator.

National Housing Corporation (NHC) director general Hamad Abdallah has been quoted explaining the need for an authority that will oversee the industry.

“The contribution of real estate to the economy cannot be fully realised without having a proper body to oversee the sector. Developers need to have clear guidelines when planning projects,” he said and urged the government to speed up the process of enacting a new law to secure the industry’s future.