The Kenya Property Developers Association recently held their Inaugral Affordable Housing Conference. The event brought together various stakeholders from government and private sector to discuss the opportunities in affordable housing in Kenya. At the event, KPDA released their 2018 Affordable Housing Report. According to the Kenya National Bureau of Statistics Economic Survey 2017, it is …
The Kenya Property Developers Association recently held their Inaugral Affordable Housing Conference. The event brought together various stakeholders from government and private sector to discuss the opportunities in affordable housing in Kenya. At the event, KPDA released their 2018 Affordable Housing Report. According to the Kenya National Bureau of Statistics Economic Survey 2017, it is estimated that the current housing deficit stands at 2 million houses with nearly 61% of urban households living in slums. The deficit continues to rise due to constraints on the demand and the supply side.
According to the report, the affordable housing sector experiences several challenges. Among them is the fact that few urban centers have implementable urban development plans. This means developers have to incur an additional infrastructure costs when constructing. This was highlighted during one of the panel discussions moderated by Mary Chege. “We cannot develop affordable housing in a vacuum. The systems in place should support it. And expanding roads is not the solution. Other forms of movement of people should also be explored,” said Eng Nathaniel Matalanga, the Honorary Secretary of Institution of Engineers of Kenya.
One of the other challenges developers face, as per the report, is high cost of construction. Construction finance loans are increasingly challenging for developers to obtain and so financing costs are included in the price when selling property. Another bottleneck is faced when it comes to registration. According to the 2017 Doing Business Survey, Kenya has a ranking of 121 out of 190 with respect to property registration. This inefficiency with the titling process is further complicated by devolution with different counties showing different levels of efficiency.
However, it is not all gloom and doom. There was discussion on some of the strategies that developers can adopt. Land joint ventures are one of the ways developers can increase returns and help land owners monetize their assets. Building smaller units can also help reduce the price of units while allowing developers to retain their margins. Another suggestion was incremental housing. The affordability of housing may be increased by making use of basic materials with the provision that home owners scan make improvements on the house over time. Finally, managing one’s cashflow is paramount. It is important to have a robust financial model at the onset of a development. We, at InVhestia, developed an online tool to assist with this. We have extensive experience working in the real estate space and have been involved in conducting financial viability assessments for various projects. Our web-based application appraises real estate projects and provides output that can be used in presentations for fundraising purposes. The platform is easy to use and gives you value for money. Try it for free at http://evaluate.invhestia.com/
You can read more about the KPDA Conference and report here