Nairobi 2017 building deals fall to Sh240bn on prolonged poll
This was down from the Sh308.4 billion projects approved by Nairobi County government in 2016.
While releasing Economic Survey 2018, Treasury Cabinet Secretary Henry Rotich blamed the fall on the prolonged electioneering period that saw local and foreign investors defer plans awaiting conclusion of the polls.
“Uptake of credit was down to a paltry one per cent unlike other years when credit, known as a major driver in projects development, reported a 20 per cent growth. But with a stable political environment in 2018, strong appetite among developers as well as planned large-scale housing developments supported by the government, we expect a better show this year,” he said.
Easing of mortgage terms especially among low-income earners as the government embarks on its ambitious 500,000 housing units development in the next five years is expected to spur growth.
Currently, Kenya has a paltry 24,000 mortgages with a housing deficit standing at two million with the deficit rising by 200,000 units annually.
According to the survey, the cost of building materials rose by three per cent compared to 1.8 per cent in 2016 while that of labour went up by 10 per cent.
Properties worth Sh85.6 billion were certified safe for occupation in 2017 representing a 10.1 per cent rise in completed projects. Private developments took up 85 per cent of all the 9,564 residential units worth Sh74 billion delivered in 2017.
The ongoing civil servants housing improvement scheme saw 1,638 units for the police and prison departments worth Sh2.35 billion commissioned last year compared to 1,062 units valued at Sh3.78 billion that were built in 2016.
Increased budgetary allocation for civil servants housing schemes saw Sh16.55 billion injected into new projects nationwide out of the Sh17.9 billion allocated, which is a 94.6 per cent absorption in 2016/2017 period.
The government has been promoting use of affordable but decent and quality building technologies that ensure faster delivery of projects.
Some 8,000 housing units in Mavoko sub-county for low-income earners are expected to be commissioned mid this year with another 59 projects planned across all 47 counties where the government has pledged to provide land for the developments.