Kenya’s real estate to recover after 2017 difficulty
The government's five-year plan to construct 500,000 houses, access to finance and a conducive political climate are some of the key factors that will shape real estate sector in 2018. Other contributing factors includes the government incentives to spur affordable housing development and growing businesses and SMEs increasing the demand for office and retail space. Last year, politics and financial crunch led to dismal performance in the sector that led to market stagnation. However, real estate analysts and experts are upbeat that the sector will regain lost ground since the fundamentals that make real estate a preferred investment vehicle still exist.
Investors still favour real estate due to high demand that grows every year. Demand for housing and supporting infrastructure far outweigh any adverse circumstances and the challenges of the past year. Acording to Victoria, a Marketing Executive at Dunhill Consulting, 2018 holds more promise and is more prospective to developers due to investor confidence after the end of prolonged political environment. Such confidence will trigger more investments and purchases of ready units across all sectors of real estate. But one of the constraints has always been finance which is a critical determinant for the sector growth.
President Kenyatta’s inauguration pronouncement to make affordable housing one of his key development planks of his final term will be another major factor that will shape real estate this year. “It is our intention to facilitate affordable housing and a home ownership programme that will ensure every working family can afford a decent home. That is why over the next five years, my administration will create 500,000 new homeowners,” said President Kenyatta during his inauguration on November 28, 2017. The policy will lower the country’s housing deficit from the current two million to 1.5 million. In short, the government must facilitate the construction of 100,000 low-cost houses annually starting this year.
Developers see that declaration as a windfall since the government will be obligated to put in requisite infrastructure to make the housing dream a reality. In his speech, Kenyatta briefly touched on measures the government would take toward the realisation of his promise. These include the injection of what he termed as “low-cost capital” into the housing sector from public and private sources, policy and administrative reforms that will lower the cost of construction, and improving accessibility to affordable mortgages. While neither the president nor the bureaucrats in the Housing ministry have released the finer details on the actualisation of this project, analysts have given some pointers to a viable roadmap.
Source: Standard Media