Experts predict livelier housing market despite election anxiety
Kenya’s real estate developers are optimistic that the upcoming general elections will not affect the rebounding housing market, one of the few bright spots since the Covid-19 pandemic hit the economy.
Just six months to the August polls and with so much else going on in the economic recovery, sector players are already glancing at opportunities resulting from reopening of the economy last year.
Mizizi Africa Homes CEO George Mburu said this year is pretty different compared to other past election years, adding that a time like this a number of people would be thinking of “going back to their tribal cocoons.”
“This is not happening partly supported by the fact that political leaders are uniting us through discussions on economic and social issues,” he said, projecting a more stable housing market, on rising economic growth trends.
Mburu also believes the shift of focus in politics to economic and social protection will go along in easing uncertainty in the housing market this election year.
Kenya’s economic cycles in 2013 and 2017 grew slightly better compared to historical dips in economies over the past years, with unemployment easing from 7.9 per cent at the start of 2013 to 7.2 per cent by close of the year. In 2017, the economy grew by 0.62 per cent. Alice Mukami, Chief executive of Gail Properties, a Nairobi-based real estate development firm shared in the optimism, saying she expects this year to be even better as the country entrenches issue-based politics.
“We are already seeing a rejuvenated housing market which is a culmination of a productive year we witnessed in 2021, and we can only foresee a brighter year despite an expected busy electioneering period,” she said.
Kenya National Bureau of Statistics (KNBS) Q3, 2021 gross domestic product (GDP) report shows the real estate sector grew marginally by 5.2 per cent, 0.3 per cent points higher than the 4.9 per cent growth recorded in Q2, 2021. A more favourable business environment, real estate experts believe, enabled the country to boost investment in affordable housing to bridge the housing deficit by pushing more people into home ownership. “Affordable housing is the only gateway to solving the housing deficit in the country and improve livelihoods,” said Peter Macharia, an economic expert who also predicts favourable relationships between financial institutions and developers in terms of home loan financing and mortgage arrangements.
Center for Affordable Housing data shows that low-cost affordable houses currently account for a paltry two per cent (1,000 units) whereas units targetted for high and middle income earners take the lion’s share of 98 per cent, representing 49,000 units. As per the Big Four blueprint, the government intends to offer affordable housing at Sh800,000 to Sh3 million per unit, at lower interest rates of up to five per cent and longer mortgage tenors of up to 30 years.