The cost of construction rose last year, due to the high prices of input materials on the back of higher inflation and the global supply chain disruptions from the Russia-Ukraine war.
An Integrum Construction Project Managers’ Report showed that construction costs ranged between Sh34,650 to Sh77,500 per square metre last year.
This was up from between Sh33,450 to Sh72,400 per square metre in 2021.
The type of property and quality of materials are among the key determinants of construction costs, with luxurious and larger houses requiring more capital to build.
“The construction costs in Kenya averaged from Sh34,650 to Sh77,500 per square metre equivalent to Sh3,219 to Sh7,200 per square foot,” the report reads.
“The 2021 cost was Sh33,450 to Sh72,400 per square metre, equivalent to Sh3,135 to Sh6,785 per square foot.”
According to the Architectural Association of Kenya’s Status of the Built Environment Report, the increase is due to taxes and runaway inflation resulting in expensive building materials, including cement and steel.
“The cost of construction has been increasing over the years, reaching a record high in recent times,” said Wilson Mugambi, the president of AAK.
During the year, AAK said the prices and availability of essential construction materials like steel, paint, aluminium, cement and polyvinyl chloride (PVC) were unreliable.
“The sharp increase in construction materials has greatly contributed to this, and the re-introduction of Environmental Impact Assessment and related levy will make this worse,” said AAK.
“There has been an increase in paint prices in Kenya, this is a result of paint manufacturers having to pay a 10 percent excise tax on imported resin, in addition to 16 percent value-added tax (VAT) on their petroleum-based ingredients.”
