Suraya secures Co-op Bank loan for Sh1.2 billion housing estate

What you need to know:

During the announcement of third-quarter property price trends last month, Ms Sakina Hassanali, Hass Consult’s marketing manager, said that the industry was expecting a surge in demand, particularly among first-time buyers.
Ms Hassanali said sales were expected to increase, especially as interest rates drop, adding that developers who push prices up too far were likely to delay selling and that would extend their financing periods.
According to the Ministry of Housing, annual demand for housing is about 200,000 new medium and low-cost houses.
Suraya expects that the dual carriage way between the Jomo Kenyatta International Airport and Machakos, currently under construction, will ease transport for Mavoko residents.

Suraya Properties has secured a loan from Co-operative Bank to finance construction of a Sh1.2 billion housing estate in Mlolongo.

The real estate development group has already started construction of an access road to the site, which is about three kilometres off Mombasa Road.

Chief executive of Suraya Property Group Peter Muraya said in an interview that Co-operative Bank will fund the bulk of the project, with the rest of the money coming from the company and prospective buyers’ deposits.

“The bank will finance between 60 to 80 per cent, but we haven’t concluded on all the details yet,” said Mr Muraya.

The development, which will be known as Sucasa Athi Estate, is Suraya’s first big-scale foray into the lower-middle and low-end housing market.

The entire project will consist of 205 bedsitters, 245 one-bedroom units and 455 two-bedroom houses, a water treatment plant and a private club house with two basketball courts and a play area.

“What we are trying to do is bridge the serious gap in housing. Everybody has been doing development of houses of about Sh4 million and above so we want to cater for the below Sh4 million,” said Mr Muraya.

Disclosures submitted in a regulatory by the National Environment Management Authority (Nema) show Suraya is planning to put up a total of 905 units of apartments on a 12-acre piece of land.A schedule of prices released in April this year showed a bedsitter has been priced at Sh900,000, a studio apartment at Sh1.3 million while one-bedroom and two-bedroomed houses were between Sh1.85m and Sh2.85 million for cash buyers.

Those financed through mortgage loans will pay Sh1.05 million for a bedsitter, a studio apartment will go for Sh1.45 million and one and two-bedroomed houses between Sh2.05 million and Sh3.1 million.

Supply of houses for the middle income market is constrained by high property prices and interest rates on mortgages.

The Central Bank of Kenya data shows there were 16,135 mortgage accounts with a value of Sh91.2 million as at the end of December last year.

During the announcement of third-quarter property price trends last month, Ms Sakina Hassanali, Hass Consult’s marketing manager, said that the industry was expecting a surge in demand, particularly among first-time buyers.

Ms Hassanali said sales were expected to increase, especially as interest rates drop, adding that developers who push prices up too far were likely to delay selling and that would extend their financing periods.

According to the Ministry of Housing, annual demand for housing is about 200,000 new medium and low-cost houses.

Suraya expects that the dual carriage way between the Jomo Kenyatta International Airport and Machakos, currently under construction, will ease transport for Mavoko residents.