A majority of Kenyans are confined to paying rent for the rest of their lives since banks have been focusing on those earning more than Sh150, 000 a month for mortgages.
In 2015, a Kenya National Bureau of Statistics (KNBS) report showed that only 68,000 Kenyans earned that amount of money. This represented 2.89 per cent of those in formal employment.
But this may change with the Kenya government’s priority to deliver one million affordable houses in 5 years. Investors in real estate have taken cue showing interest in developing low to middle-income housing which may enable those without mortgages access to owning homes.
The Architectural Association of Kenya (AAK) President Arch. Emma Miloyo says both the real estate and construction sectors recorded an increase in activities from both investors and developers in the first quarter of 2018.
When giving the Status of Built Environment Report on Thursday last week, Miloyo noted that dignified, affordable housing has been a key issue in the Built Environment. Many Kenyans are unable to finance houses of their choice since mortgages are unaffordable.
Collapsing buildings has become an issue recently hitting headlines due to poor workmanship and ironically, soaring prices.
“The Status of the Built Environment Report addresses the key issues in the industry within Real Estate, Land investor and developer scene, Policy, infrastructure and building permit approvals,” Miloyo said.
She applauded the government’s move to provide land to private investors who will then take advantage of various building technologies and economies of scale to deliver affordable homes.
“The 15 per cent corporate tax relief to developers who put up at least 100 affordable residential houses and creation of the Kenyan Mortgage Refinancing Company (KMRC) – an initiative by the World Bank and the Kenyan Government aimed at enhancing mortgage affordability and facilitate long-term are also something to reckon with,” added Miliyo.
She attributed the slower construction growth in the first 2018 quarter to the ongoing public infrastructural projects such as roads, phase two standard gauge railway and continued development of buildings.
“The Construction sector grew by 7.2 per cent in Q’1 2018 compared to 8.2 per cent growth in Q’1 2017. This deceleration was also reflected in the decline in the volume of cement imported; cement consumption; and volume of construction materials imported such as iron, steel bars and rods.”
The real Estate recorded an increase in various activities mainly driven by the government’s focus on affordable housing.
Miloyo added: “House prices increased by 2.08 per cent in Q1’2018 compared to a 0.68 per cent increase in Q4 of 2017 and this was attributed to the conclusion of market transactions put on hold during the prolonged electioneering period.”
In 2018, maisonettes led the market at 56.17 per cent of the total units offered for sale followed by bungalows at 39.11 per cent and apartments coming third at 4.72 per cent.
The mall-type retail landscape performance continues to decline mostly due to the increased a high supply and slow uptake of this space.