The share of Kenyan households owning homes has shrunk by at least three percentage points over a decade, a new survey has revealed, as more people moving to urban areas prefer to rent houses.
Fresh data by the Kenya National Bureau of Statistics (KNBS) shows that the share of households that own homes dipped to 61 percent in 2024, from 64 percent 11 years ago, while the number of those living in rentals exceeded homeowners.
In 2024, 8.5 million families were living in their own homes compared to 5.9 million in 2013, translating into a rise of just 2.6 million, or 44 percent growth. Total households rose by 4.7 million, or 51 percent, to 13.9 million over the same period.
However, the number of renters grew at a faster rate of 64 percent from 3.3 million households in 2013 to 5.4 million in June last year.
This raised the share of renters from 36 to 39 percent, pushing down homeownership ratios.
The decline in the share of Kenyans owning homes comes against the backdrop of efforts by successive governments to help Kenyans own homes by unveiling affordable housing units for the poor and the middle class in major urban areas.
Several factors might have dented prospects for homeownership during this period, including reduced purchasing power and, the collapse of most developers which might have dissuaded would-be home owners.
“This is a period when the purchasing power of most Kenyans was so down that they could not afford to acquire new homes,” said Johnson Denge, a partner at Olah ATP LLP.
Moreover, there has been a general shift in investment priorities by the millennials, unlike their predecessors who valued land and houses, added Mr Denge.
The report also highlights a trend of continued rural-to-urban migration, which might also have contributed to the drop in home ownership. An increasing number of people abandoned, or even sold, their inherited rural homes for urban dwellings, piling pressure on urban housing.
Besides private developers, the homeownership agenda has been pushed by the administrations of retired President Uhuru Kenyatta and now President William Ruto, with both promising affordable houses for low- and middle-income Kenyans.
The Kenyatta administration’s goal was to build half a million low-cost housing units in the five years to 2022 while his successor has given himself a target of one million by 2027.
Despite these efforts, homeownership has continued to underperform, with experts pointing to a tough economic environment that has seen most of them prioritise other needs.
Over the review period, the number of households in urban areas rose by 45 percent from 3.7 million to 5.4 million, an increment of 1.7 million or 131 percent, while those that own their dwelling places only increased by 133,305.
This translates to just 12,118 additional new home purchases annually over the period, which means that President Ruto, who launched his affordable housing programme in 2023 with a target of building 200,000 homes annually, has his work cut out.
The report reveals that the majority of Kenyans who bought homes used their own savings, a departure from other jurisdictions where homes are bought through mortgages.
“Nationally, 91.4 percent of home acquisitions were financed through cash/ savings, while 5.5 percent through loans,” says the report.
“Uptake of mortgage was low across the country with less than one percent of households reporting to have acquired their homes through mortgages.”
Experts reckon that the main reason most Kenyans have shunned mortgages is they are expensive, with financiers charging double-digit interest rates.
As part of its affordable housing programme, the government plans to refinance home loans through the Kenya Mortgage Refinance Company (KMRC)--a move which is aimed at reducing interest rates to less than 10 percent.
In Kenya, where most people live in rural areas, more people own homes than rent.
With the increased population putting pressure on rural land, young people have been flocking to urban centres in search of economic opportunities. However, most of them have found themselves in indecent dwellings in slums where there is poor sanitation and other social amenities.
The faster growth in population than in homeownership has meant that over two million households now live in rented houses or are squatting, mostly in urban areas as millions more relocate to cities and towns in search of greener pastures.
Homeownership rates in urban areas have worsened more than in rural areas, with the percentage of those owning their homes declining by 7.0 percentage points from 30 percent in 2013 to 23 percent in 2024.
In comparison, 86 percent of rural dwellers now own their houses, a slight decline from 88 percent 10 years ago. Rural households owning their homes rose by 2.5 million to 7.2 million from 4.8 million in 2013.
The rural population, on the other hand, rose by 55 percent or 3.0 million households to 8.5 million from 5.5 million in 2013.
The survey further reveals that homeownership rate is lowest in Nairobi and Mombasa, where only 7.7 percent and 24 percent of residents respectively own the houses they live in, while 89 percent and 72 percent respectively rent.
The rest of Nairobi and Mombasa households live rent-free, either as squatters or with the permission of the owners.
Vihiga, West Pokot, and Wajir are leading in homeownership, with 93 percent, 90 percent, and 89 percent respectively living in their own homes.
Only six counties – Nairobi, Mombasa, Kajiado, Lamu, Kiambu, and Uasin Gishu – have less than half of the households living in their own homes.
Despite the falling homeownership rate nationally, 63 percent of house-renting Kenyans polled by KNBS said they had no plans at all towards homeownership, while only 26.2 percent are saving towards land purchase, construction, or buying a house.
A vast majority of the Kenyans renting say they chose to stay in rented houses rather than their own dwellings because it is either too far from their workplaces or is in their rural homes.
Affordability of rent is the top determining factor of where to live for 52 percent of renters, while 17.8 percent consider proximity to the workplace and 8.9 percent consider proximity to amenities.
The renters have, however, not had it easy. Since 2019, rent has increased for 87.4 percent of the tenants across the country, mostly for those who live in houses owned by individuals or agents.
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