Category: House Construction

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Will the New Kwacha Notes Affect the Cost of Building?

New Zambian kwacha notes with Bricklayer in background

Disclaimer: This information is for general knowledge and guidance only. It does not constitute financial or investment advice. The following is just my opinion. Feel free to give yours in the comments below.

On March 31, 2025 the Bank of Zambia released the new Zambian Kwacha notes. The old notes will be valid for 1 year. First of all, I must say I love the look of the new notes including the sizes. I just wish we could all take care of the money and not fold it so much because it shortens its lifespan.

Now, there are many factors that affect the cost of construction but today lets just look at the introduction of the new currency. These are my initial speculations. Expect the cost of construction to likely go up. Why?

From my perspective, the introduction of higher value notes like the K500 kind of devalues it in terms of perspective. You can now buy a bag of cement with one bank note and even get some change. A bag of cement was trading at around 155-175 in March 2025. Let’s see what the price will be by May 2025 onwards. We will keep monitoring and update you. So expect some price fluctuations as the industry adjusts.

You might be wondering though, as a home builder, does the cost of construction ever reduce? On rare occasions. Your biggest expense on any project will be the cost of materials. One such material is cement because it’s used in the foundation and the superstructure even during finishes. One such rare occasion when the cost of construction reduces is when there is healthy competition by material suppliers. For example, when a new cement manufacturer entered the Zambian construction sector in the past, prices dropped significantly. It’s unlikely that we will see such a drop soon but we can only hope for the best. 

The key takeaway here is that you should build as soon as practically possible based on your finances but please follow the right procedures and obtain building permission before starting. To get building permission you need a house plan designed by a registered architect.

One way to lock in the cost of construction regardless of new currency is to use a registered contractor. It may look more expensive at first but contractors take all the risk like currency fluctuations and the hassle of sourcing quality materials at a good price. The cost of construction also becomes predictable with a contractor because you lock them into a contract which has a fixed amount and desired outcome.

If you are ready to start your building project plus you already have an approved house plan and need a quotation for construction please get in touch with Sieben Construction for a quote for construction that you can lock in.

Share your thoughts on the new Kwacha notes. Post your comments below.

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Build a Servants Quarter Before Your Dream Home as Your First Home in Zambia

Start Small, Dream Big Later

The dream of owning a home in Zambia is a powerful one. Visions of a beautiful, custom-built house often dance in the minds of first-time builders. I have seen several people chase this dream and fail or give up. While ambition is admirable, practical considerations should guide your initial steps. Building your “dream home” as your very first project can be a risky endeavor, often leading to unexpected costs, delays, and frustrations.

The First Build is always a Learning Curve

Construction, even on a modest scale, is a complex process. It involves navigating permits, sourcing materials, managing contractors, and understanding local building codes. Your first project will inevitably be a learning experience, filled with valuable lessons that you simply can’t learn from books or online resources.

Why risk your dream home on a process where mistakes are almost guaranteed?

I believe building a smaller, simpler home is the best way to go. A long time ago (apologies to people born in the 60’s-70’s), government houses would have a main house and a servants quarters. These servants quarters would be 3 roomed houses (Not bedrooms) with a toilet/shower attached outside. No tiles, ceiling just basic finishes. Okay so maybe they were a bit too basic but here’s why you should start with a smaller project. Building a small first project allows you to do 4 things:

  1. Minimize Financial Risk: Construction costs can quickly spiral out of control, especially when unforeseen issues arise. Starting with a smaller and simpler project limits your financial exposure and allows you to gain experience without jeopardizing your entire savings.  
  2. Gain Practical Knowledge: You’ll learn firsthand about budgeting, material selection, contractor management, and quality control. This experience will be invaluable when you’re ready to tackle your dream home.
  3. Avoid Costly Mistakes: Mistakes are inevitable during any construction project. By starting small, you can make those mistakes on a smaller scale, minimizing their impact on your finances and your overall satisfaction.
  4. Secure a Place to Call Home: Building a smaller, functional home provides you with a comfortable and secure place to live while you plan and save for your dream project.

The ideal first step is a simple, functional home.

Instead of jumping into a complex, expensive project like building your dream house or multiple flats, consider building a smaller, simpler home to start. A one or two bedroom (maximum) house with basic amenities can provide a comfortable living space while you gain experience and save for your dream home. Of course, this means when you buy a plot, buy as big as possible.

This approach offers several advantages:

  1. Lower construction costs.
  2. Faster construction time.
  3. Reduced stress and risk.
  4. Valuable learning experience. You will now practice what you learned on your main house.
  5. You get to monitor progress of your main house/dream house at close range since you will probably already live on the property and have acclimatized to living in the new area.

By starting small, you’ll be better prepared to build your dream home with confidence and avoid the pitfalls that often plague first-time builders. Your first home should be a stepping stone, not a financial and emotional burden. With careful planning and a realistic approach, you can turn your dream of homeownership into a reality, one step at a time.

What do you think about building yourself a small servants quarter first? post your comment below.

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New Housing Project Announced in Lusaka South

The Ministry of Infrastructure, Housing and Urban Development, in partnership with the National Housing Authority (NHA) and Ongos Valley Development (PTY) Ltd of Namibia, has announced a new housing project in the Lusaka South Multifacility Economic Zone (MFEZ).

Project details

  • A total of 10,000 housing units will be constructed, with the first 2,000 units available from June 2025.
  • Units will cater to low, medium, and high-cost categories. Something for everyone.
  • Units will be available for purchase or rent-to-buy options, including mortgage and installment payment plans.

Project Aims

The project aims to address Zambia’s housing deficit by providing affordable and decent housing options for all socioeconomic groups.

Our Take

This project has the potential to provide much-needed housing for Lusaka residents. The variety of housing options and financing plans should hopefully cater to a wide range of needs.

Here are some additional points to consider:

  • It is important to carefully review the details of the project, including the eligibility criteria and the terms of the financing options, before registering your interest.
  • The construction timeline for the entire project is not yet clear.
  • It is advisable to conduct your own research on the developer, Ongos Valley Development (PTY) Ltd, to learn more about their experience and track record.

We will continue to monitor this project and provide updates as they become available.

Disclaimer: We are not endorsing this project and recommend you DO YOUR OWN DUE DILIGENCE before making any decisions.

Here’s the link to the announcement by the Ministry.

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Is Building a Block of Flats on Your 20×30 Plot Profitable?

Couple smiling at each other

Disclaimer: This information is for general knowledge and guidance only. It does not constitute financial or investment advice.

Should you just build for the sake of it? When it comes to investing in rental properties, we all want to make money but the question is: Is building a block of flats on a 20×30 plot profitable?. There are several ways to determine this. In this short article we are going to examine one way of determining whether you are getting a good return on your investment. This is called Capitalization Rate or Cap Rate. Let’s use an example of a block of flats in Chalala, Lusaka. Grab a pen and paper.

STEP 1. Calculate your Projected Annual Rental Income (ARI)

Determine Monthly Rent (R):

  • Research comparable rentals in the area to set a competitive market rate. Be realistic.
  • Consider factors like size, amenities (e.g., parking, appliances), and property condition.
  • Rent in Chalala 2 by 2 bedroom house R = 5,500 x 2 = 11,000 per month

Calculate Annual Income (ARI):

  • Multiply monthly rent by 12 months.
  • Account for potential vacancy periods (e.g., between tenants). 
  • ARI= 11,000*12= K132,000

STEP 2. Determine Annual Operating Expenses (AOE)

Add up all the annual operating expenses you expect for example:

  • Mortgage Payments: Include principal and interest.
  • Property Taxes: Give to Caesar what belongs to Caesar. Caesar is Zambia Revenue Authority, Ministry of Lands etc.
  • Insurance: Many people in Zambia don’t take this seriously but please insure your house.
  • Utilities: (If you pay any)
  • Maintenance and Repairs: (Estimate for routine and unexpected costs)
  • Property Management Fees: (If applicable)
  • Vacancy Costs: (Estimate potential lost income during vacant periods)
  • Total Annual Operating Expenses AOE= K90,000 (just an example factoring in all the above, K7,500/month )

STEP 3. Calculate Net Operating Income (NOI)

Formula: NOI = ARI – AOE

NOI = Annual Rental Income – Annual Operating Expenses

= 132,000 – 90,000

Net Operating Income -NOI = K42,000

STEP 4. Calculate Return on Investment (ROI) 

Capitalization Rate (Cap Rate):

  • Focus: Property’s purchase/construction price. Let’s assume you bought the flats at K1,000,000
  • Formula: (NOI / Purchase Price) x 100
  • Our Cap Rate = 42,000/1,000,000= 4.2%

A Higher Cap Rate: Generally indicates higher potential return. However, it can also signal higher risk. Example: A higher cap rate might suggest a lower property value or higher vacancy rates. If our house in Chalala was 500,000 the cap rate would have been 8.4%.

Lower Cap Rate: May suggest a more stable and less risky investment, but with lower potential returns. Example: A lower cap rate could indicate a more desirable location or higher property value.

IMPORTANT: ANALYZE AND COMPARE

  • Compare your calculated ROI with other investment options.
  • Consider your risk tolerance and investment goals.
  • Accurate Estimates: Use realistic figures for all income and expenses.
  • Have a long-Term View: ROI can fluctuate over time. Consider long-term appreciation potential.
  • Market Conditions: Research local rental markets for trends and potential challenges. Sometimes the project can yield better results in a different town.
  • Professional Guidance: Consult with a real estate professional or financial advisor for personalized advice. Seek professional advice from a financial advisor or real estate investor. The above are just my opinion.

Even if your property does not yield good results after this calculation, there are still other ways you can gain a benefit. We will discuss this in another article. I hope this gave you a better understanding.

Post your comments below.

#buildinginzambia #buyinglandinzambia

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Free houses in Japan vs Building in Zambia

At the time of writing this, I was sitting in my apartment in the lesser known city of Gifu, in Japan. I kept thinking to myself, “is it worth getting a free house in Japan or investing back home?“

Japan is giving away free houses called Akiya’s and people around the world, especially Americans, are raving about it and buying them. An Akiya is a Japanese term that refers to an abandoned or unoccupied house. These properties often become vacant due to factors such as death, population decline, family structure changes, and economic hardship. While they might seem like a fixer-upper, Akiyas can present unique opportunities for real estate investors, particularly those seeking affordable housing options.

I’ve been observing both the Japanese and Zambian real estate markets. While these countries offer vastly different landscapes, it’s fascinating to compare the potential returns and challenges associated with investing in each market.

Akiya in Japan: A Unique Opportunity

  1. Population Decline: Japan’s declining population has led to a surplus of Akiya. This can make it relatively affordable to purchase a property, even in desirable locations. However, this population decline also means there are less people available to rent your house.
  2. Renovation Costs: the initial purchase price of an Akiya can be significantly lower than a newly constructed home and sometimes they are given out for free. The catch is that you have to carry out renovations. Sometimes they are sold with property inside meaning you will incur the disposal fees. 
  3. Language Barrier: For non-Japanese speakers, navigating the property market and renovation process can be challenging. However, with the right guidance and resources, it’s certainly possible.
  4. Cultural Differences: Would a Japanese person rent from a foreigner? I’m not sure, but having a language barrier and cultural differences might chase away potential tenants. In Japan they have what is called key money for example. This is paid to the landlord as a thank you for allowing the tenant to stay in your house. 
  5. Return on Investments: If you find a good Akiya in a place where lots of tourists go, it can easily be turned into an airbnb with potential to recover the investments in a lesser number of years. Assuming you get the house almost free or at a very affordable price.
  6. Earthquakes: Japan is prone to earthquakes. A building that was built 30 years ago has survived at least 1 major earthquake. Building codes have also been updated since 30 years ago to offer better earthquake resistance which old houses like Akiya’s might be lacking.

Building in Zambia: A Growing Market

  1. Population Growth: Zambia’s growing population is driving demand for housing. This presents a significant opportunity for real estate investors and developers. The population is projected to continue growing just like the rest of Africa.
  2. Land Costs: Compared to many developed countries, land prices in Zambia are relatively low. This can make building new homes a more affordable option.
  3. Construction Costs: While construction costs can vary depending on location and materials, they are generally lower than in many developed nations.
  4. No language barrier or major cultural differences: Unlike Japan, Zambian culture is not so different from western cultures and its easy to understand.

A Comparative Analysis

When comparing Akiyas in Japan and new builds in Zambia, several factors come into play:

  • Initial Investment: The initial cost of purchasing an Akiya in Japan is supposedly low but for the same amount of money, one could build multiple houses in Zambia. The tricky part about Akiyas is controlling the renovation costs.
  • Long-Term Returns: The potential for long-term returns can vary depending on factors such as location, market trends, and the quality of the property.
  • Risk: Investing in an Akiya involves some risk due to potential renovation costs and the need to understand local regulations. There is also the risk of earthquakes destroying your old building. Building a new home in Zambia offers more control but also carries its own risks, such as construction delays and cost overruns. However, these can be mitigated against.

Conclusion

Both Japan and Zambia offer unique real estate opportunities. While Akiya in Japan present a potentially affordable option, building a new home in Zambia can provide greater control and potentially higher returns. The best choice for you will depend on your individual circumstances, risk tolerance, and long-term goals. For me, Zambia takes the win. WHICH ONE DO YOU THINK IS BEST FOR YOU?

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New Online Class: Stages of Building a House in Zambia!

Announcing the Launch of Our New Online Class: Stages of Building a House in Zambia!

We are excited to announce the launch of our new online class, “Stages of Building a House in Zambia.” This class is part of our series of online classes about real estate and construction in Zambia.

In this class, you will learn about the different stages of building a house in Zambia, from the initial planning and design to the final move-in. We will cover topics such as:

  1. First days before starting:
  2. Stages of building a house:
    • Stage 1: Foundation & Substructure
    • Stage 2: Shell
    • Stage 3: Metalwork, Electrical, Plumbing
    • Stage 4: Finishes & Landscaping

This class is perfect for anyone who is interested in building a house in Zambia, whether its your first-time or an experienced builder.

We are confident that this class will be an invaluable resource for anyone who is looking to build a house in Zambia.

We hope you will join us for this exciting new class!

Enroll today and start your journey to building your dream home in Zambia!

Sincerely,

Born the Builder

P.S. Be sure to check out our other online classes!

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