, NAIROBI, Kenya, Apr 2 – The high costs of construction are pushing players in the real estate industry towards prefabricated housing schemes to address the shortage in a more efficient manner.
Kenya Commercial Bank’s (KCB) Mortgage Division is seeking to establish a stake in new building technologies, which the Director Joram Kiarie said will inevitably increase mortgage uptake in the country as houses will become cheaper.
“We have started a partnership with a group called Zen House. We’ve already approved some facilities along those lines for a developer to begin putting up some houses in Kitengela,” he said.
Kiarie said prefabricated housing has an opportunity to be adopted on a wider scale in the counties, especially once homeowners are convinced that prefab housing is a formidable and more affordable alternative to the traditional brick and mortar.
Among other efforts the bank has made in reducing the cost of building and construction for developers, Kiarie said, is partnering with local developers that are willing to work with new building technologies.
“We are looking forward to inviting developers who want to use new technology and partner with them to finance them to do it. In terms of acceptance from a bank’s perspective we have agreed that we will finance that kind of new technology building,” he said.
The bank’s counterparts have ventured into financing new technology building such as Equity Bank which launched its new micro mortgages product in partnership with Mabati Rolling Mills (MRM) last year that finances the cost of purchasing pre-fabricated, quality-assured steel frame structures from MRM.
Kiarie said KCB’s mortgage book more than doubled to Sh33.7 billion as at 31 December 2011 from Sh15.6 billion in 2009 raising KCB’s mortgage market share to 40 percent.
However, despite this growth Kiarie acknowledged that mortgage uptake has been generally low citing the bank’s inability to translate the monthly 700,000 hits to its property guide website into actual mortgage owners.
“Anyone who hits on the portal is interested and is thinking of owning. The way to increase mortgage uptake is embracing new types of technology, building outside of main cities where land is cheaper and we can begin to see houses worth Sh2 million,” he said.
Kiarie was speaking during the signing of a preferential partnership deal between KCB Mortgages Division and Crown Berger to facilitate reduction of construction costs for developers.
Through the Mortgage Division’s offshoot S&L Developers Club, developers in the region will receive a 20 percent discount on Crown Berger decorative and industrial paints, over the next year.