NAIROBI, Kenya, Aug 24 – The increasing availability of mortgage finance coupled with flexible repayment terms is driving up the number of young professionals who are seeking to own homes.
HassConsult Property Development Manager Farhana Hassanali said on Tuesday that with the growth of the real estate sector, many mortgage providers have emerged and so have the avenues for investments which have in turn pushed young people into saving for the initial mortgage deposit.
“In the past, a lot of the off-plan developments have called for cash payments and have required buyers to basically have money available in cash which they can disburse over the project period,” she explained as one of the hindrances to mortgage uptake.
However, projects such as the various housing developments that are taking place in the outskirts of Nairobi have seen deposit rates pegged at 10 to 30 percent of the cost of the mortgage with long repayment periods, which the manager said is affordable for many Kenyans.
Ms Hassanali for instance pointed to the EdenVille housing development in Kiambu and which is under their management where the firm has reported that 80 percent of new 3-4 bedroom villas have been bought in just six months since they went up for sale.
“To date, 215 out of 345 units have already been sold. 110 of those purchases have been made by young Kenyan families. These are villas which sit on one eight of an acre each within a gated community with a very attractive price range of Sh10.5million goes up to Sh15million. We are having single women and young families buying with the youngest being a 25 year old,” she disclosed.
Although this points to people who are in well paying jobs, Ms Hassanali said it also dispels fears that the local property market is being driven by foreigners. Speculation has been rife that the country has been awash with illegal money which has helped push up the property prices.
“For many years, a lot of the statements regarding the property market have been that Kenyans are not buying but this shows something completely different particularly for the middle income market,” she explained.
Recent findings have shown that many Kenyans are moving away from rentals and into home ownership particularly in areas surrounding Nairobi where land is overpriced.
The high cost of financing these homes also continues to be a hindrance for majority of Kenyans. Ms Hassanali reckoned that this cost would only come down if there’s competition among mortgage financiers.
Despite the shift towards home ownership, the firm forecasts that there will always be a market for rentals to accommodate for example those in business who cannot afford to have their money tied up in a mortgage.