Debate on affordable housing to take center stage at EAPI summit

Available data shows that associated-costs of bringing up an average house have increased dramatically in Nairobi since 2010, ten-fold jump from Sh400,000 to Sh4 million for the most inexpensive home. Yet mortgage uptake remains low with only 25,000 mortgage-purchased homes in total.

By Newsroom On Apr 4, 2018

Property developers will get a chance at this year’s EAPI Summit to renew campaigns on affordable housing projects presently being championed by the Government, which is also a core theme by industry stakeholders.

Slated for 24th and 25th April the East Africa Property Investment Summit (EAPI) will seek to address challenges facing the region’s quest to have affordable housing for its citizens and possible remedies.

Government’s aim of building one million affordable homes in five years, if successful, could ignite a lagging real estate sector, and place Public-Private Partnerships (PPPs) at the center of economic life for one of Africa’s most rapidly urbanizing countries, according to Kfir Rusin, the managing director of EAPI Summit.

“We’re bringing private and public-sector stakeholders together under one roof at EAPI 2018, and we believe we will develop the roadmap to making affordable housing a reality,” he said, adding that recent moves by the government to introduce tax incentives, providing land and investing a considerable portion of its GDP into industrial construction plants to reduce capital expenditure (CAPEX) by developers are some of the ways affordable housing will be achieved.

Home ownership for most Kenyans is also being stalled by tedious financing models with the need to reducing costs and providing finance for aspirant homeowners thought to be ideal move in locking the industry’s potential.

While the government remains tight-lipped on what an ‘affordable home’ Chairman of Kenya Property Developers Association Mucai Kunyai defines it as a building costing up to Sh4 million to buy and aimed at households that earn between Sh40,000 and Sh100,000 per month.

“Our members are keen to unlock the key obstacles that have hindered progress in the sector in the past, including proper planning by local authorities, provision of adequate infrastructure, and a complete overhaul of the Land Registries, whose ability to deal with the existing volumes of transactions is already strained,” he says.

Mucai believes that the demand for affordable housing is one of the most significant opportunities for PPPs in Africa, with Kenya having the opportunity to create a workable model for the continent to adopt.

The need to develop bulk infrastructure has been a principle driver for developers in focusing on higher-end consumers alone, in delivering an estimated 35,000, mostly un-affordable, homes per year, while the lower and middle end of the market continues to be undeserved.