NHC plans Sh5bn bond as housing demand increases

The closing cost item includes a down payment that ranges from 10 to 20 per cent, legal fees, stump duty, valuation fees, life insurance and loan registration fees.

Kenya’s demand for houses is estimated at 200,000 units per year, which is way above the supply of 40,000 units, creating a mismatch and pushing up the prices.

“The existing prices are driven by the forces of supply and demand with other issues such as security, accessibility and amenities seen as critical”, said Linet Oyugi, a policy analyst with Institute of Policy Analysis and Research (IPAR).

While acknowledging the high cost of houses may be locking out many potential homeowners, players, however, are calling for use of local materials to bring down cost of development.

“We need to change the country’s building codes to allow the use of locally available materials such as stabilising blocks to reduce the cost of development, which will bring down the final prices,” said Mr Reginald Okumu of Ark Consultants.

The government has received the recommendation on the review of the building code which awaits Cabinet approval before being taken to Parliament for enactment.

The review will see among other things the use of locally available materials, use of appropriate technology and putting up of highrise residential houses.

“Potential developers should demonstrate competence in introducing innovative construction technology to reduce construction time and costs”, said Mr Kirubai.

The robust real estate sector, which seems to have defied the overall tanking of the economy due to the global crunch, has largely favoured urban areas.

However, to address the emerging housing needs in other parts of the country, NHC intends to cover the whole country.

Skewed growth

Lack of appropriate financial solutions, especially for the rural areas, has contributed to the skewed growth.

By also factoring in the rural areas, the agency will unlock the economic potential associated with construction projects by creating jobs and offering opportunities for traders and transporters.

The plan to engage landowners indicates the corporation’s projection to carry out largescale housing.

It is looking to partner with land owners who have a minimum of five acres of land.