Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
This is according to a new report by Cytonn Real Estate that indicates interest rates as the contributing factor to low mortgage penetration/FILE

Kenya

Nairobi’s metropolitan area a ‘renters market’

This is according to a new report by Cytonn Real Estate that indicates interest rates as the contributing factor to low mortgage penetration/FILE

This is according to a new report by Cytonn Real Estate that indicates interest rates as the contributing factor to low mortgage penetration/FILE

NAIROBI, Kenya, Apr 25 – Nairobi’s Metropolitan area will remain a renters market as mortgages continue to be unaffordable to many.

This is according to a new report by Cytonn Real Estate that indicates interest rates as the contributing factor to low mortgage penetration.

Finance institutions are currently offering mortgages at a rate between 12 percent and 21 percent which remains high relative to income levels in the market.

As the interest rate environment is not expected to change in the near future, the report states this will see more people renting as opposed to buying and the Nairobi Metro market remaining a renters market.

“On varying interest rates apartments are affordable at 8 percent with detached housing in all areas at 3 percent except Kahawa,” the report says.

The report says many people in Nairobi Metropolitan area purchase houses using cash with sources for cash mostly savings and loans from Saccos and other financial institutions.

According to the report, the unaffordability of mortgages has also seen many home buyers though living in the city, going to construct houses in their rural homes.

The areas where mortgages are affordable include Buruburu, Embakasi, Umoja and Kayole as these places have lower house prices in relation to their income.

Mortgages are least affordable in Nyari, Muthaiga and Ridgeways due to high house prices as a result of close proximity to social amenities.

“Githurai is the most affordable mortgage market requiring a median income between Sh25,000 – Sh50,000 to purchase a house using a mortgage. Areas such as Nyari, Karen, Runda, Muthaiga and Kitisuru are the most unaffordable mortgage markets with households requiring a minimum of Sh3.1 million to purchase a house through mortgage option,” the report states.

Advertisement. Scroll to continue reading.
Click to comment
Advertisement

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...

Headlines

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

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...

Kenya

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

Coronavirus

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

Coronavirus

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

Headlines

NAIROBI, Kenya, Mar 16 – The World Bank has given the Kenyan government USD 60 Million (Sh6.1 billion) to help combat the deadly coronavirus pandemic...