Developers call for greater support to deliver low-cost housing
Real estate investments firm Cytonn is calling for an even greater support for developers in the government led focus on the delivery of affordable housing units for its citizenry.
This, even as the firm notes the increasing role of the state in arriving at the sustainable development goals under public-private partnerships.
Investors are however concerned over the feasibility of the project noting that funds raised from the units may not be adequate enough to bring down the cost of housing in totality.
Speaking during the release of the 2017/18 Nairobi residential report on Monday, Cytonn Real Estate senior analyst Patricia Wachira said the cost of housing is likely to remain at par in spite of provisions to ease credit access.
“The proposals will increase liquidity for the primary lenders but may not address the actual costs house costing. The risk premium charged on lenders may be high locking out low income earners while funds raised under the National Housing Development Fund may be inadequate given the relatively low incomes of Kenyans,” she said.
The government has since moved in to lay the foundation for the implementation of the same setting up the Kenya Mortgage Refinancing Company (KMRC) and the National Housing Development Fund (NHDF).
Aimed at easing credit access with a goal of providing the necessary financial backing for the initiative, the two units are expected to boost the supply of long-term capital to potential home owners.
Cytonn’s senior regional markets manager Johnson Denge however lauded the government efforts noting their impact on the affordable housing agenda so far.
“For the first time the government’s budgetary allocations have prioritized on the affordable housing agenda under the government’s overall development plan. This effort in itself shows the government commitment to realize the goal,” Mr Denge said.
In addition to the statutory support the government has outlined other plans such as first time buyers being exempt from stamp duties while background checks to include the informal sector will be conducted to boost home ownership.
Developers are also in on the incentives receiving a 50 percent slash on corporate taxation for every 100 affordable units built.
Once complete, the low-cost units are expected to hit the market at a cost of between Sh800, 000 and Sh3 million.
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