Connect with us

Hi, what are you looking for?


Cheaper housing still a mirage

NAIROBI, Kenya, May 5 – A section of players in the housing industry have said that only concerted efforts from the government and the private sector will help to significantly bring down the cost of housing in the country.

Housing Finance (HF) Managing Director Frank Ireri argued on Monday that although the enactment of the new building code may help to reduce construction costs, other factors such as the high cost of land and infrastructure may hinder the realisation of making housing affordable for all Kenyans.

“With the government playing its role around the provision of subsidised or adequately-priced land and putting in place infrastructure, then it makes it much easier for private sector players like us to also come in and play our part,” Mr Ireri said.

The firm has been vocal in the calls to have the current code which requires developers to use outdated technology and procedures which adds on to the construction costs. The modern law is however expected to be in place by September.

He added that they have continued to impress upon the government the need to implement all or most of the incentives for developers and home owners that have been outlined in the Housing Bill of 2006, so as to unlock the potential in low cost housing.

Some of the recommendations in the bill include the waiver of stamp duty for first time home owners, reduction in Value Added Tax (VAT) and tax holidays for developers.

It is estimated that the country has an annual housing deficit of 150,000 units against a supply of between 20,000 and 30,000 houses.

Housing Finance’s plans to revive its subsidiary, the Kenya Building Society, which is expected to play a pivotal role in their medium and long term plan to provide mass housing solutions are still on course, Mr Ireri said.

He spoke after releasing HF’s first quarter results for 2009, which showed a 155 percent growth in pre-tax profit from Sh27.1 million registered in the same period last year to Sh68.9 million driven primarily by retail mortgage.

Advertisement. Scroll to continue reading.

The MD also credited this to the increase in their net loans and advances, which went up by Sh3 billion to Sh11.2 billion despite the challenges that have been experienced in the last few months.

The value of their good books rose by 46 percent to Sh10.1 billion while their Net Non Performing Loans (NPL) declined by Sh219 million to Sh777.4 million, Mr Ireri added.

“We are targeting home owners; people who have been paying rent and are looking for a product that they can convert their rental payments into a mortgage one,” he said, while trying to explain why they had recorded a drop in their NPL despite the harsh economic times.

At the same time, he said that they had no intention of increasing their mortgage lending rate despite the uncertain outlook of interest rates, which were likely to come under pressure from domestic borrowing from the government.

He revealed that they would continue to introduce innovative products into the market and were awaiting cabinet’s approval to operationalise the regulation that supports pension backed mortgages.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...