Developers have no choice but to increase the price of materials and services after recent tax review that increased the cost of fuel and introduced a 20 per cent storage levy for imported goods.
Low-income earners may lose out in the planned affordable housing units’ deal if the government fails to cut taxes on construction material.
Institution of Surveyors of Kenya (ISK) chairman Abraham Samoei said developers have no choice but to increase the price of materials and services after recent tax review that increased the cost of fuel and introduced a 20 per cent storage levy for imported goods.
Construction machinery at quarries and project sites use diesel and petrol that have witnessed a price rise in the past month.
“If we have the low-income earners at heart, we need to waive levies on numerous construction materials for first-time homebuyers and also look into the recently passed eight per cent petrol levy that made transport costs go up,” he said.
"Developers including saccos, pension funds and private individuals will have to factor costs of transport and construction material in the final price for each house thereby making the units expensive beyond the reach of low-income earners."
Real estate developer Daniel Ojijo, who is also the chairman of realtor Homes Universal, said construction material prices must be checked, adding that unavailability of infrastructure increased the price of the units by 35 per cent.
“Most developers invest in cabro stones to improve the status of access roads to the houses as well as construct drainage and sewer pits.
“These costs are lumped onto the final cost of individual units,” he said.
Mr Ojijo urged the introduction of alternative construction financing saying bank loans were costly with the average mortgage being Sh9.1 million at 13.5 per cent interest rate, which was unaffordable to over 90 per cent of Kenyans.
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