Data from the National Construction Authority (NCA) compiled by the Architectural Association of Kenya (AAK) shows that the application fees increased from Sh215.9 million between July and December in 2020, to Sh479.6 million in a similar period last year.
The improvement comes at a time when the construction sector is recovering from an economic slowdown induced by the coronavirus that saw developers freeze new projects amid uncertainties in the sector.
The value of building projects seeking permits in Nairobi more than doubled to Sh118 billion in the six months to December last year, as property developers rushed to take advantage of the rebounding economy that has increased demand for homes.
This helped double the application fees earned by the Nairobi Metropolitan Services (NMS) to Sh479.6 million, making it one of the fastest revenue streams for the city county.
Data from the National Construction Authority (NCA) compiled by the Architectural Association of Kenya (AAK) shows that the application fees increased from Sh215.9 million between July and December in 2020, to Sh479.6 million in a similar period last year.
However, the number of submissions dropped from 970 in the second half of 2020, to 638 in a similar period in the following year, indicating that the new buildings are high value.
“July and December (2021) had the highest number of Building Plans submitted for consideration with a total of 471 applications being submitted,
“The estimated cost of development for building applications submitted during the same period stood at Sh118,2 billion with the NMS Development Control earning a total of Sh479.6 million in permitting fees,” the AAK says in its Built Environment status report published last week.
The improvement comes at a time when the construction sector is recovering from an economic slowdown induced by the coronavirus that saw developers freeze new projects amid uncertainties in the sector.
New projects were also hampered by low demand for office spaces as companies adopted working from home formulas.
The real estate sector has been one of the worst-hit by the pandemic, due to reduced purchasing power among potential buyers and renters, while developers have also found it harder to access credit due to fears by lenders that they will struggle to move the units and repay back the loans.
A survey that was done in June by AAK on the impact of Covid-19 on the built environment showed that 87.5 percent of consultants experienced significant decreases in clients inquiries for new projects.
“Consultants were also increasingly finding it difficult to obtain construction supplies and materials with another 31.3 percent of the respondents reporting that the period had also seen an escalation in the difficulty of obtaining development approvals,” said former AAK President Mugunde Njendu earlier.
