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Market News

Off-plan homes lose demand over completion woes

homes construction site
A homes construction site in Nairobi. FILE PHOTO | NMG 

Only 40 percent of Kenyans would consider buying off-plan houses following much-publicised missed completion timelines with many planning to buy ready apartments near workplaces.

A survey by Nairobi-based Sagaci Research and McKinsey commissioned by emerging markets realtor Actis and partner Shapoorji Pallonji Real Estate (SPRE) that interviewed 400 Nairobians in the past month showed 75 percent were interested in buying a ready-to-occupy apartment.

“70 percent plan to use their personal savings to finance their purchase and only 30 percent will obtain a mortgage,” said the survey commissioned ahead of Actis-SPRE’s August commissioning of their Sh6.5 billion 624-unit housing at Garden City.

The survey also found that 60 percent will not buy off-plan, citing lack of information on the final product and emerging concerns on developer reliability.

The survey comes hardly days after several developers missed completion deadlines blamed on diminished development loans and unfriendly mortgage terms.

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Garden City Housing development chief executive Chris Coulson said deep-pocketed house development companies selling affordable products located in prime areas in Nairobi would continue attracting higher sales than off-plan sales.

“Kenyan companies must re-affirm confidence among prospective house buyers by providing built houses that are of high quality for Nairobians to buy at affordable prices,” he said.

The survey also found Nairobians were keen on buying properties with adequate security, reserved spaces for greening, gardens and balconies.

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