Demand rises for housing in Kenya

June 23, 2010
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, NAIROBI, Kenya Jun 23 – Demand for shelter in the country is putting pressure on housing developers who are feeling the heat in meeting the rising demand.

Top on the list of concerns is diminishing land to put up structures as well as fluctuating land prices leading to a housing deficit.

In urban centres, it is estimated that the housing deficit stands at 150,000 units despite numerous projects coming up every year.

National Housing Corporation (NHC) Chairman Bosire Ogero said the parastatal was down to its last piece of land in Nairobi’s Langata area, putting on it immense pressure to construct low cost houses for Kenyans.

“We also have a problem with the processes of land allocation for housing developments in urban areas and where land is allocated to us it ends up being grabbed,” Mr Ogero said.

He said the price of land in Nairobi and surrounding areas has doubled over the past three years due to increased demand, locking out working class Kenyans from home ownership.

This has led to the number of families owning homes to drop from 30 percent, to about 12 percent in the last four years.

To add onto this, Mr Ogero said the housing approval process by local municipalities was slowing down the pace at which developers can put up housing units.

“The planning by-laws used take a long time to get the approvals obtained,” he said.

The annual supply is estimated at 30,000 units, while demand stands at 150,000 units.

Funding has also proved challenging for developers with Mr Ogero calling for access to pension funds to construct houses.

He was speaking during the handing over of the Langata Court estate phase one and two by NHC.

The houses will retail at between Sh3 million and Sh5 million for a three bedroom house, cheaper than the Sh6 million that the private sector is charging.

The corporation is using the tenant purchase concept to provide houses to the middle and lower income categories involving payment of a deposit and settling the balance in instalments over a longer period running up to 18 years.

Once complete (phases four and five), the housing project will have 900 units.
 

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